Decisions by the U.S. Securities and Exchange Commission (SEC) appear to have put a temporary damper on the current Bitcoin rally. Does the quick recovery to $8,250 mean the bull reversal is still intact?
BTC 00 dipped to $7,900 on the recent denial of the Winklevoss brothers Bitcoin ETF application, and the postponement of Direxion BTC ETF decision by the SEC, but it’s clear that current events were not the sole factor for this mild pullback. As Bitcoin rallied to new monthly highs it also became oversold but the king of cryptocurrencies recovered quicker than expected and now appears to be gearing up to retest the 200-day MA at $8,476.
Bitcoin 00 remains above the ascending trendline and is currently trading within a tight $200 dollar range along the $8,225 support which is also slightly above the 100-day MA. A pattern of higher-lows and higher-highs can be seen and even though the 5-day MA has begun to descend toward the 10-day MA, the 10 continues to ascend while BTC currently trades above the 20 and 100-day MA. At the same time, the 50 MA is also in the process of crossing above the 100-day MA.
At the time of writing, both the RSI and Stoch are falling towards bearish territory. However, there is soft support at $7,940 and a sturdier support at $7,750 and $7,400. If BTC falls below the bullish trendline at $7,984, a revisit to the $7,750 support could occur. The 5, 10 and 20-day moving averages remain above the 100-day MA, suggesting that the path of least resistance favors additional upside gains and current technical indicators suggest that BTC will continue to trade within the $8,100 to $8,300 range for the short term.
The suggestion of further short-term range-bound trading is supported by the flattened RSI and slightly narrowing Bollinger Bands on the 4-hour chart. BTC rides right along the 20 MA and while the gap between the 5 and 10-day MA narrows, BTC remains in the ascending channel.
Traders should look for further constriction of the Bollinger Bands, along with a rising RSI as this could be indicative of an impending breakout to the 200-day MA at $8,476. Again, a drop below the ascending trendline at $7,903 could drop BTC to the next support at $7,750 and $7,400.
The short-term bullish outlook remains intact as BTC continues to trade in the ascending trendline and the longer moving averages remain biased towards bulls.
BTC will likely remain range-bound for the short term and traders should keep an eye for additional constriction or even bullish expansion of the Bollinger Bands, along with any rise in the RSI on the hourly and 4 hour chart.
BTC is well supported below $8,000 and a drop below the bullish trendline at $7,940 could cause BTC to fall to the $7,750 and $7,400 support.
A high volume breakout above the $8,476 (200-day MA) could extend BTC price toward $9,000.
Where do you think Bitcoin price will go this week? Let us know in the comments below!
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