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article imageBitcoin recovers to well above the $4,000 level today

By Ken Hanly     Nov 28, 2018 in Technology
Bitcoin(BTC) fought its way back well over the $4,000 level as it recovers from recent lows below that. Today the price is moving up but the path of least resistance remains to the downside.
CoinDesk analysis
In his analysis on CoinDesk, Omkar Godbole notes that it appears that BTC will end November below a key long-term support level for the first time in the last three years. The 21-month exponential moving average (EMA) at $5,896 that served as a price support floor for the last five months was breached last Nov. 15. As Godbole's article went to press at 18:55 UTC on November 27, BTC was trading at $3,650 on Bitstamp.
The drop below the EMA support level indicates that the sell-off from the record high of almost $20,000 set last December and has been continuing most of this year is ongoing again. The path of least resistance is to the downside. Since conditions are oversold there could be a brief bounce, but a further recovery beyond the 21-month EMA is not in the works for the short term. A close below this level on Friday UTC time looks to be quite certain. This would be the first monthly close below this EMA support since October way back in 2015.
Chart analysis
The monthly chart shows that the 21-month EMA restricted the downside slide from June to October. In spite of the continued failure of the bears, the bulls were not able to mount a big rally. The chart also demonstrates that Bitcoin's last break below the 21-month EMA in September of 2014, remained valid for a full 13 months. Bitcoin could stay below that level, now a resistance hurdle, for some time.
The outlook for the next 24 hours is still bearish as BTC is trapped in a falling channel on the 4-hour chart. The stacking of the 50-candle EMA below that of the 100-candle EMA and then the 200-candle EMA is a clear bearish signal. However, Godbole does put in the caveat that the relative strength index (RSI) is exhibiting a bullish divergence. The sign would gain credence only if the price is able to clear the immediate resistance of $4,000.
Gobole's outlook
Based on his analysis Godbole's view is: "BTC’s drop below the crucial 21-month EMA support may have lessened the odds of leaving the bear market for possibly months more. A break below Sunday’s low of $3,474 would mean the recovery to $4,000 was just another dead cat bounce and prices could then drop to psychological support of $3,000. BTC may test $4,500 (upper edge of the falling channel) in the next 24 hours if prices clear the psychological hurdle of $4,000, validating the bullish divergence of the 4-hour chart RSI. The outlook as per the monthly chart would turn bullish above the new resistance of the 21-month EMA, currently at $5,896. "
Present situation
24 hours ago according to CoinDesk data, BTC was trading at $3,820. It reached a high of $4,341. At 21:20 Central Standard Time it was trading at $4,136 well clear of the $4,000 level. It is up more than $300 dollars on the day or over 8 percent. While the price has not yet tested the $4,500 level, as Godbole suggested yesterday, it is certainly headed in that direction. The bulls are showing some strength but it remains to be seen if the price continues up. The present price of Bitcoin can be found here.
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