Bitcoin Bounces Back to $8K From Historically Strong Price Support

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  • Bitcoin has once more bounced up from the 100-week transferring common – a degree which has acted as sturdy help within the earlier two weeks and in the course of the early levels of the earlier bull market.
  • The protection of the 100-week MA coupled with the oversold circumstances on the each day chart suggests scope for a restoration rally to $eight,500.
  • The case for a bounce would weaken if costs discover acceptance under the help degree, at present at $7,753. That might pave the way in which for a slide to $7,200.

Bitcoin (BTC) has once more defended traditionally sturdy worth help close to $7,700, preserving the hopes of a corrective rally alive.

The highest cryptocurrency confronted promoting stress and fell under $eight,000 over the weekend, contradicting the potential for a restoration rally above $eight,500 recommended by a key technical indicator on Friday.

Even so, all is just not misplaced for the bulls, because the widely-tracked 100-week transferring common (MA) help has held floor. BTC nearly examined the important thing technical line at $7,753 within the Asian buying and selling hours earlier than rising again above $eight,000 round 12:20 UTC.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(zero)–sm Mt(zero.8em)–sm" sort="textual content" content material="Associated: Bitcoin Is 2019’s Finest-Performing Asset, Even After Current Price Downturn” data-reactid=”19″>Associated: Bitcoin Is 2019’s Finest-Performing Asset, Even After Current Price Downturn

Notably, the long-term MA has been performing as sturdy help because the final week of September. Now, the bears’ repeated failure to penetrate key help could draw bids from short-term merchants, yielding a corrective rally.

BTC’s protection of the 100-day MA might also excite long-term buyers, because the MA had served as a base throughout nascent levels of the earlier bull market, as seen within the chart under.

Weekly chart

Bitcoin picked up a bid at lows close to $200 in August 2015 and located acceptance above the 100-week MA in December. The cryptocurrency then confronted purchaser exhaustion above $460 and fell again to the 100-week MA help within the week ended Jan. 17, 2016.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(zero)–sm Mt(zero.8em)–sm" sort="textual content" content material="Associated: Bitcoin Could Be Headed for a Stronger Price Bounce” data-reactid=”40″>Associated: Bitcoin Could Be Headed for a Stronger Price Bounce

The help degree, then positioned at $367, was defended within the following three weeks, after which BTC by no means seemed again and went on to hit a document excessive of $20,000 by December 2017.

Basically, BTC created a better low alongside the 100-week MA seven months forward of the mining reward halving, which occurred in August 2016.

The value motion seen this yr seems to be very comparable to the one seen in 2015-2016. For example, BTC bottomed out within the first quarter and rose to a excessive of $13,880 on the finish of June earlier than falling again to the 100-week MA.

Extra importantly, the most recent protection of the 100-week MA comes seven months forward of the subsequent reward halving, scheduled for Could 2020.

If historical past repeats itself, BTC may chart a stable bounce from the 100-week MA help over the subsequent few weeks.

Furthermore, many observers view the present dip as a possibility to board the bitcoin feight prepare. For example, George McDonaugh, CEO and co-founder of KR1 plc, the London-listed cryptocurrency and blockchain funding firm, informed CoinDesk Markets he expects bitcoin to surpass the all-time excessive of $20,000 within the first half of 2020.

The short-term technical charts are additionally calling a corrective bounce.

Each day and weekly chart

Bitcoin’s current drop to sub-$7,800 ranges is accompanied by falling buying and selling volumes (above left). A low-volume drop is usually short-lived.

Additional, the oversold studying on the 14-day relative power index (RSI) has gained credence due to indicators of vendor exhaustion close to the 100-week MA. On the identical time, the MACD histogram is producing shallow bars under the zero line, an indication of weakening bearish momentum.

All-in-all, a bounce to the 200-day transferring common (MA) at $eight,564 nonetheless seems to be doubtless. A violation there would expose resistance at $eight,833 (June 2 excessive).

If costs discover acceptance under the 100-week MA at $7,753, the case for a corrective rally would weaken and the cryptocurrency would doubtless drop to $7,200. Observe that the weekly chart indicators are biased bearish.

As of writing, BTC is altering fingers close to $eight,000 on Bitstamp, representing a zero.7 % drop on a 24-hour foundation.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(zero)–sm Mt(zero.8em)–sm" sort="textual content" content material="Disclosure: The creator holds no cryptocurrency belongings on the time of writing.” data-reactid=”70″>Disclosure: The creator holds no cryptocurrency belongings on the time of writing.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(zero)–sm Mt(zero.8em)–sm" sort="textual content" content material="Bitcoin picture through Shutterstock; charts by Buying and selling View” data-reactid=”71″>Bitcoin picture through Shutterstock; charts by Buying and selling View

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