Bitcoin (BTC) has recovered 38 percent of an overnight sell-off and remains on track to test the long-term inflection point above $12,000, technical charts indicate.
The cryptocurrency ran into offers above $11,700 yesterday, according to CoinDesk’s Bitcoin Price Index (BPI) and fell to $10,691.43 at 04:29 UTC. As of writing, the BPI is back at $11,162 – down 1.5 percent for the last 24 hours.
On Coinbase’s GDAX exchange, BTC was last seen changing hands around $11,079, which is the 38.2 percent Fibonacci retracement of the 1,125-point drop that lasted from late American session to late Asian session.
Furthermore, the cryptocurrency is up at least 85 percent from lows seen on Feb. 6. Still, many in the investor community believes BTC is still in a bear market and the sharp rise from the lows below $6,000 is only a “corrective rally” inside the bigger downtrend.
The view has merit, given the cryptocurrency is still trading well below the descending trendline drawn from the Dec. 17 high and Jan. 6 high. However, short-term momentum studies favor upside in BTC prices.
- Trendline resistance is seen around $12,300.
- The 5-day moving average (MA) and 10-day MA continue to rise in favor of the bulls.
The previous day’s candle with its long upper shadow (big gap between the intraday high and UTC close) signaled bullish exhaustion. However, the swift recovery from the low of $10,650 has kept the bulls in the game.
That said, the weekly chart is not so bullish for BTC.
- The weekly 10-MA has adopted bearish bias (downward sloping).
- The retreat from $11,175 marks rejection at the weekly 10-day MA.
- Also, as discussed, the RSI still favors the bears