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article imageBitcoin falling again to almost $3,200 after brief recovery

By Ken Hanly     Dec 13, 2018 in Technology
A slight recovery by Bitcoin yesterday was followed by a deep downturn later on in the day that halted only a bit above the $3,200 level. It is not clear whether the next big move will be up or down or when it will happen.
CoinDesk analysis
Omkar Godbole posted an article on CoinDesk analyzing the price movements of Bitcoin (BTC) last updated at 11:49 UTC. He notes that Bitcoin is consolidating below the $3,500 level for the third day in a row. He says it is a challenge to assess whether the bulls or the bears will gain control in the coming days.
Yesterday, as discussed in a Digital Journal article, Godbole argued that there could be a corrective rally if the price of BTC manages to break through the initial resistance now at $3,633. The bullish case is also supported by the fact that Bitcoin's 14-week relative strength index (RSI) is showing oversold conditions. This is the first time since January of 2015. It would seem then that a corrective rally should be overdue.
If the narrowing price range over the last five days should end with a bullish breakout, then the odds of a move above the $3,633 level would increase. As of now, the upper edge of the price range is at $3,456 with the lower edge at $3,360.
It should be remembered though that in recent weeks, BTC has been unable to create a significant lasting rally. At press time, BTC was priced at $3,400 on Bitstamp. This is down 0.75 over the last 24 hours.
Chart analysis
The hourly chart has created a symmetrical triangle indicating a narrowing price range. A bull breakout from the triangle would give credence to the 3-day inverted hammer candle indicating that bargain hunters are beginning to buy challenging the attempt to push prices lower by the bears. The triangle breakout if it happens could result in a quick run higher than the $3,633 level.
If prices drop below the triangle support at $3,360 then the price could risk falling to the 200-week moving average(MA) of $3,179. However, that support will likely hold given the extreme oversold conditions indicated by the 14-week RSI.
The 6-hour chart shows a falling channel breakout of an RSI trendline. To many technical analysts this often precedes a break in the price trendline as well. So it could indicate an impending bullish price move.
Godbole's view
Based on his technical analysis Godbole believes: " Bitcoin could see a stronger recovery rally if prices close above $3,633 on Friday. A symmetrical triangle breakout on the hourly chart would boost the probability of BTC finding acceptance above $3,633. A symmetrical triangle breakdown would be a bearish development, although downside could be restricted around the 200-week MA of $3,179. That said, the bullish scenario looks more likely to play out, as the 14-week RSI is signaling extreme oversold conditions and the 6-hour RSI is biased toward bulls."
Present situation
24 hours ago Bitcoin opened at $3,381 according to CoinDesk. It reached a high of $3,411 and posted a low of $3,208. As of 20:25 Central Standard Time BTC was trading at $3,248 down almost 4 percent during the period. The price has dropped considerably below the $3,360 level but so far have not been able to reach the $3,179 support level but turned up just before $3,200. However, there may be some further consolidation before another downturn. There is no sign yet of another recovery rally. Even some who are bullish on Bitcoin think that a bottom has not yet been reached. The present price of BItcoin can be found here.
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