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article imageBitcoin bounces up modestly today but still below $4,000

By Ken Hanly     Jan 4, 2019 in Technology
Although recovering modestly from yesterday's dip, Bitcoin (BTC) is still well off the $4,000 level and has yet to test key resistance levels even though technical analyses suggests it should. Perhaps it will do so over the weekend.
CoinDesk analysis
Omkar Godbole gives his daily analysis of the price movements of Bitcoin at CoinDesk, the article being last updated at 12:07 UTC January 4th. Godbole notes that the recent drop of BTC from highs above $4,200 could actually be a bear trap at least that is what price volume analysis would indicate. As Godbole's article went to press BTC was trading near $3,848. It had clocked a low of $3,642 on December 28 a level that is down 14.7 percent from the high of $4,272 on December 24 according to data at CoinMarketCap.
Daily trading volumes across all cryptocurrency exchanges have been dropping during the last few days. 24-hour trading volume stood at $4.57 billion a drop of 36 percent from the December 24 high of $7.24 billion. A low-volume price pullback is often considered as a sign that weak buyers are leaving the market and is insignificant. The recent decline is probably temporary and the bearish-to-bullish trend shown by the 3-day chart back on December 20 is still in play. However, if the price of BTC dips below the key support level of $3,550 the bullish case would weaken.
Chart analysis
The 3-day chart shows BTC closing at $4,073 on December 20, confirming a bullish outside-candle reversal So far, however, the follow through has been disappointing. Prices have dropped within the last ten days but at the same time volumes have fallen off as well. Should the price of BTC drop below the December 27th low of $3,566 then the bullish reversal would then be invalidated.
The 6-hour chart shows the triangle breakout confirms that the rally from the December low of $3,122 has resumed. The hourly chart seen in the one hour chart shows a bull flag breakout indicating a resumption of the rally from the January 1 low of $3,629. The path of least resistance is to move upwards.
On the daily chart, Bitcoin is most likely showing an inverse head-and-shoulders bullish reversal shape. The neckline resistance is at $4,170. The bullish setups indicate that there could be a test of $4,170 in the next few days.
However, there are contrary signs. The 50-day moving average (MA) is still declining and this is bearish signal. If BTC cannot pass through the $3,900 hurdle in the next couple of days, BTC's price could very well drop again.
Godpole's outlook
Based on his analysis Godbole believes: Bitcoin’s low-volume drop from the recent highs above $4,200 is nothing more than a temporary correction. BTC remains on the hunt for a break above $4,000. The bulls, however, need progress soon, as repeated failure to take out the 50-day MA of $3,900 could prove costly. A break below the Dec. 27 low of $3,566 would open the doors to re-test of the December low of $3,122.
Present situation
24 hours ago BTC was trading at $3,765. Since then the low has been $3,725 and the high $3,866. At 18:45 Central Standard Time Bitcoin was trading at $3,836 or a little more than $70 up from its open a change of almost 2 percent upwards. There is no test yet of the $3,900 level but the price has come reasonably close. Perhaps tomorrow will see a breakthrough. At least now BTC is moving in the right direction. The present price of Bitcoin can be found here.
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