In spite of the drop a recent CoinDesk article claims the technical outlook is still bullish.
CoinDesk’s analysis
As mentioned earlier the drop yesterday may in part be due to the SEC’s second rejection of an application for a bitcoin exchange-traded fund. However, the CoinDesk article argues that overbought conditions were also a likely factor. The short-term chart had warned of this yesterday. suggesting there could be a dip below $8,000.
At press time for the article, 11:18 UTC, the price of bitcoin on Bitfinex was $7,965, after posting a low of $7,848 earlier in the day. BTC is still up 40 percent from a June 24 low of $5,755 in spite of its dip from the two-month high above $8,500. The bull market is likely to remain. However, the price is still less than half what it was at the all-time high of near $20,000.
The four-hour chart shows that the relative strength index (RSI) could have helped trigger the recent price correction. The drop saw bitcoin breach the rising channel yesterday and this had the effect of neutralizing the immediate bullish outlook.
A lower highs and lower lows pattern was also established another bullish signal.
However, the 50-candle. 100-candle and even 200-candle moving averages are all rising and are above one another, a bullish indication. The correction also enabled the RSI to become in a more bullish position. It no longer reports an overbought situation,
Some investors may question the validity of the long-term bullish breakout as the price falls back. However, such a dip often happens as there are overbought conditions. This is often termed “crowding out of weak hands” or bulls with low-risk appetite but this presages a further rally.
A longer term rally appears to be in the cards. This would be confirmed if BTC closes the end of the week on Sunday above the $8,050 mark, the falling channel resistance. The short term outlook remains bullish as the 5-day and 10-day MA’s are rising. BTC is also trading well above the 50-day and 100-day hurdles. These are all signs of a continuing rally.
Meanwhile, BTC retains a short-term bullish outlook, as the 5-day and 10-day MAs continue to rise in favor of the bulls. What’s more, BTC is also trading well above the 50-day MA and 100-day MA hurdle.
https://www.coindesk.com/bitcoin-retains-bull-bias-despite-price-drop-to-below-8k/
CoinDesk’s view based on its analysis
CoinDesk’s outlook is: “The short-term outlook remains bullish, despite the overnight correction in BTC prices. The 200-day moving average hurdle of $8,557 could be put to test over the weekend if prices find acceptance above $8,000 in the next 24 hours. On the downside, only a daily close below the rising 10-day MA of $7,718 would abort the short-term bullish view.”
Present situation
On Thursday BTC opened at $8,166 but in contrast the open today was just $7,829. However, so far today bitcoin has hit a high of well above $8,000 at $8,270. At press time, 20:48 UTC the price is $8,213. While BTC has not yet tested the $8,557 200-daay moving average, it have found acceptance again above the $8,000 level. We should expect the bullish trend to resume. The present price of BTC can be found here.
