CoinDesk’s analysis
A recent CoinDesk article claims that bitcoin appears primed for a minor rally by having defended a key moving average (MA) support during the last three days. The 50-day MA a widely tracked technical indicator has been put to the test during the last two trading day. On both occasions the prices failed to penetrate below the MA support at the daily close. This signals bearish exhaustion.
Today so far up to 12:39 UTC the price is following a similar pattern. Bitcoin picked up support around the 50-day MA support lever of $6,598 and then rose back up over $7,000 with the prospects of a recovery rally. As the article went to press bitcoin was trading at $7,050 on Bitfinex exchange a move up of 0.70 per on a 24-hour basis.
The successful defense of the 50-day MA level and early signs of bullish reversal seen on the short-duration chart indicate there could be a stronger rally towards $7,400.
Chart analysis
The current 4-hour candle is just above the top end of the falling channel. If the candle closes above the falling channel hurdle this would signal a bullish breakout from the bearish pattern. If this happens the BTC price could rise to the down-sloping 100-candle MA that is currently at $7,438.
This appears likely as there is a bullish divergence of the relative strength index, showing that there could be a rally.
The daily chart showed a bearish outside-day candle Monday with the day beginning with optimism but ending pessimistic. However, the upward swing of bitcoin today appears to confirm the bearish exhaustion shown yesterday. The 5-day MA and the 10-day MA are still favoring the bears though.
Should prices of BTC close today below $6,487 the sell-off from the July high of $8.507 would most likely resume.
CoinDesk’s outlook
Based on the above analysis, CoinDesk takes the following view: “BTC looks set to take out the falling channel resistance and could rise toward $7,400 in the next 24 hours, courtesy of the bear failure at the 50-day MA support and the bullish RSI divergence. BTC risks a deeper drop below $6,700 (rising trendline support) if prices find acceptance below $6,847 (previous day’s low) today.”
Present situation
Bitcoin opened today below $7,000 at $6,937 but then climbed to a high so far of $7,148. The low so far today has been $6,892.
As of 20:15 bitcoin was having a large drop and was at a low for the day $6,892. It is coming dangerously close to the $6,847 level. However, there are still close to four hours to go in the day but right now the bears should be happy. The present price of bitcoin can be found here.
UPDATE: A delayed decision on a bitcoin ETF by the SEC may have caused the drop.
