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Signs point to a possible Bitcoin price recovery bounce

CoinDesk analysis

Omkar Godpole has his usual daily analysis of Bitcoin price movement on CoinDesk today. It was last updated at 11:19 UTC November 23. Godepole notes that for the second time in four days, Bitcoin (BTC) has managed to defend a long term support level.

Bitcoin fell below $4,242, the Wednesday inside-day candle low, putting the bears back in control and BTC fell below the 200-week exponential average of $4,182 early today. But this may have been a bear trap as when the article went to press the price was back up to $4,330 on Bitstamp after an intraday low of $4,061 earlier in the day.

The long-term EMA had been breached first on Tuesday but the subsequent sell-off ended at the 14-month low of $4,048 and the price recovered to $4,500 on the Wednesday. This repeated failure to break through the long-term support shows the bears are running out of steam. A stronger corrective rally could happen within the near future.

Chart analysis

The 4-hour chart shows the relative strength index (RSI) has created a divergence with higher lows, a bullish sign. BTC could test the $4,635 which is the neckline of the double-bottom bullish reversal pattern. If BTC breaks above that it could open up the way to reach a target of $5,100.

The daily chart shows that the relative strength index (RSI) is staying below 30 for the ninth day in a row, showing that oversold conditions are still ongoing.

As the 5 and 10-day EMAs are at present at $4,546 and $4,933 respectively and are still declining any rally above the $5,000 level could find itself running out of steam about $5,000.

Godpole’s outlook

Based on his analysis Godpole’s view is: “Repeated defense of the 200-week EMA likely indicates seller exhaustion. A break above $4,635 would confirm a double-bottom breakout on the 4-hour chart and could yield a stronger recovery rally to $5,100. A weekly close on Sunday (UTC time) below the 200-week EMA of $4,182 could prove costly, as the next major support is located directly at $3,100 (200-week simple moving average).”

Present situation

According to CoinDesk data, BTC was at $4,166 24 hours ago. It has gone as low as $4,119 since but has also been as high as $4,378. At 19:15 Central Standard Time it was at $4.346 around $180 dollars above its open or a more than 4.3 percent rise. However, there is still a long way to go to break above $4,635. Perhaps tomorrow the bulls will have more to cheer about. The present price of BTC can be found here.

UPDATE: On Saturday November 24 so far Bitcoin has broken down past the $4,000 level hitting a low so far of $3,668 before a minor recovery still below $4,000. The long trend down appears to be continuing for now. This is one of several times when the Bitcoin price has gone counter to technical signs. The commentator in the appended video may be right.

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