A few days ago, BTC seemed on an unstoppable march into above-10k territory, a feat which – if accomplished – would almost certainly have earned it additional momentum to about 12k. Alas, the effort fell short, as the bulls lost traction at the psychological resistance level of $10k. With the momentum gone, the bears swooped in, taking the price slightly below 9k about a day ago, a level from which it has since rebounded.
What exactly are we looking at now? It is clear that despite this recent rebound to around 9.3k, BTC is still looking weak, though not quite as weak as it looked earlier in the day. According to technical analysis, this recent rebound carries some rather massive significance and it is already in the books, so it may well be that a larger sell-off, that would’ve taken BTC to around 7.7k, has been averted.
The drop off the near-10k levels mentioned above did not exactly surprise anyone. The signs had indeed been there, and when the bear flag breakdown surfaced yesterday, it became clear the bulls would have their work cut out attempting to defend 9k.
Interestingly, had the bulls failed to hold the line at 9k, a drop all the way below 8k would’ve become a possibility. All that is in the rearview mirror now though.
The 4-hour chart makes it clear that the 50 and 100 MAs have topped out, shedding their bullish bias. The RSI also points to bear strength, stuck below 50.
As you can see on the hourly chart below, a downward-trending channel has developed, which has bear strength written all over it.
Not long ago though, an upside break of the falling channel occurred (marked with the arrow) and sure enough – as analysts had predicted – this resulted in a mini-rally to almost 9.3k.
If the bulls still manage to get the better of it though, a fall below 9,055 will result in a further drop towards the 8.6k mark. A daily close below that level would mean still further weakness, opening the way to 7.7k. Such an event would also signal the end of the rally we have seen take the price from the April 1 low of 6.4k to its recently seen, near 10k level.
Though somewhat more timidly than over the last few days, technical indicators are still screaming “Buy”. More precisely, the MAs are. 10 of them say Buy, one of them is Neutral and only one points to Sell.
Meanwhile, the oscillators are mostly on the fence: 9 of them are Neutral, and two of them say Sell, with none pointing to Buy. As you see on the one-hour chart above, the Stochastic is indeed in oversold territory already and its lines have crossed too, so it is definitely pointing to an impending reversal too.
What about the fundamentals though?
Is there anything in the works news-wise that could give the bulls or the bears an unexpected boost?
There are a number of positive, blockchain-related bits floating around, but as always, they hardly carry anything of any significance from the specific perspective of the BTC/USD pair.
The Winklevoss brothers are at it again: they have recently won a patent claim focused on the settling of cryptocurrency-holding ETPs. As part of their push to forward the trading of crypto ETFs, this is indeed potentially good news for BTC bulls too, it is just too far-flung at the moment to have any kind of noticeable impact.
In other news, BTC’s Lightning Network has become much less reckless and risky lately. This is great news indeed, although it is about developments that will likely unfold over a longer time-frame, thus being unlikely to elicit any sort of short-term price-tweaks.
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