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article imageBitcoin almost recovers to near $5,600 but then drops back again

By Ken Hanly     Nov 16, 2018 in Technology
While Bitcoin today appeared to be in a recovery mode from its recent large fall, it seems to be starting to decline again somewhat. It reached almost to $5,600 before declining to a low of $5,422 from which it appears to be recovering.
CoinDesk analysis
Omkar Godpole has his usual analysis at CoinDesk last updated today at 14:29 UTC. Godpole notes that if the past is used as a guide, Bitcoin (BTC) could be in for a recovery rally at least in the short term. After Wednesday's slump of a full 10 percent, BTC posted an intraday low of just $5,188 on Thursday but managed to recover to close largely unchanged at $5,580 UTC.
The price swing what is called a "a long-tailed doji" candle shown on the daily chart. This is usually taken as a sign of indecision in the market. The fact that it appeared at the bottom of a recent sell-off shows that it is predominantly among sellers that there is indecision and this could be a sign of bearish exhaustion. During 2018 so far BTC has seen corrective rallies in the days following a long-tailed doji candle.
Chart analysis
Daily charts show that BTC created a long-tailed candle back on February 6 and afterwards rallied to high beyond $11,700 during the following two weeks. On April 5 another long-tailed candle appeared to be followed shortly after to highs above $9,900. The same pattern repeated itself in both July and August.
On each of these occasions the relative strength index indicated oversold conditions as is happening now. One negative feature is the each of the rallies ended up creating a lower price high so the overall tendency continued downward.
When Godpole's analysis went to press BTC was trading at $5,540 on Coinbase which was up 6 percent from the previous days low of $5,188. The stage may be set for a corrective rally as high as the resistance level of $5,777 the June low. A break higher from this would allow a test of $6,000 the level at which BTC had apparently had a long term bottom until the recent break through.
However, if BTC finds acceptance below the previous low of $5,188 the historic pattern many not repeat itself. A break below this level would signal a continuation of the sell-off and downward trend.
Godpole's outlook
Based on his analysis, Godpole's view is: "BTC could revisit $6,000 in the next week or two, having charted a long-tailed daily candle alongside an oversold RSI in the last 48 hours.The overall outlook remains bearish as long as prices are holding below $6,000. A close today below the yesterday’s low of $5,188 would invalidate the short-term bullish view and allow a drop to $5,000 (psychological hurdle)."
Present situation
Bitcoin has had a high today of just under $5,600 at $ 5,596 but as mentioned has been as low as $5, 422 below the $5,500 level. At 21:55 Central Standard Time the price was at $5,511 slightly above the $5,000 but down somewhat from 24 hours ago. It looks as if the day will not close below the $5,188 level and so possibly break through $5,000. However, there is not much good news for the bulls either as there is no sign of the recovery gaining ground as yet. The present price of BTC can be found here.
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