Will a 6% drop in bitcoin price hamper the current rally which has produced a 35% gain since March 3rd?
Highlights
April continues to amaze but after an impressive rally, Bitcoin and other majors showed signs of bearish exhaustion as the market became overbought after topping out at $9,767 today.
Daily Chart
As predicted BTC met stiff resistance near the 200-day MA ($9800) and while today’s pullback is mildly disconcerting, the longterm set up for BTC remains positive.
4 HR Chart
- The underlying bullish trend remains intact as BTC continues to trade above the descending channel and the 50-day MA remains above the 100-day MA, continuing an upward ascent which is also mirrored in the 100 and 200-day MA.
- As BTC descends, $8,400 is the nearest support, and recall that last week’s 50-day MA near ($8,500) was the breakout point BTC needed to cross in order to open up the rally towards $10,000.
- BTC could drop to the current 50-day MA but at this point, bulls have put up a fight around $8,800 and a drop to $8,600 probably won’t hold for long.
- At the time of writing the 5-day EMA and 10-Day MA continue to trend south, as does the Stoch which indicate further decline could be in store but it should be noted that BTC has rebounded from $8,785 to $9,045 so a return to today’s high and even $10,000 could occur when the Stoch and RSI show signs of reversal.
Vision
- The long term setup for BTC remains positive and continued growth towards $10,000 is likely.
- $8,600 – $8,800 remain a contested zone with $8,400 serving as the most immediate support.
- A dip and close below $8,500 is concerning but not catastrophic as BTC continues to trade above the descending channel.
- This is a healthy correction after a nearly 35% gain since March 3rd. As the Stoch and MACD reverse the rally should recommence and BTC may touch new highs above $10,000.
Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by BITFINEX. The charts for analysis are provided by TradingView.
Where do you think Bitcoin price will go this week? Let us know in the comments below!
Image courtesy of Shutterstock, Tradingview.com
