Bitcoin Selloff Stalls at Historical Price Support Near $10K - OhNo WTF Crypto

Breaking News

Bitcoin Selloff Stalls at Historical Price Support Near $10K

#crypto #bitcoin

View

  • Bitcoin’s defense of the 100-day moving average and a bullish divergence of an hourly chart indicator suggest scope for a minor price bounce to $10,300
  • Bitcoin will remain in the hunt for a drop to $9,467 (Aug. 13 low), as long as the rising wedge breakdown seen on the 4-hour chart remains valid.
  • A UTC close above $10,956 would shift risk in favor of a rally to $11,850-$12,000. A weekly close above $12,000 is needed to confirm bullish revival.

Bitcoin (BTC) sellers are again struggling to force a sustained break below a widely-followed support level, but the outlook would turn bullish only above $10,956.

The premier cryptocurrency by market value fell by $600 in the Asian trading hours on Wednesday, confirming a rising wedge breakdown on the intraday charts.

The bearish reversal pattern opened the doors for a retest of the Aug. 15 low of $9,467, as discussed yesterday. So far, however, that target has remained elusive and the dips below the 100-day moving average (MA), currently at $9,900, have been short-lived.

It’s worth noting that the long-term MA worked as strong support earlier this month. The cryptocurrency ran into bids below the 100-day MA on Aug. 15 and closed (UTC) that day with gains above $10,300. The average was again defended on the following day and the subsequent price bounce ended up hitting highs above $10,950 on Aug. 20.

So, if the 100-day MA continues to hold ground over the next few hours, chart-driven buying could lead to a price bounce.

As of writing, BTC is changing hands at $9,970 on Bitstamp, representing a 1.7-percent loss on the day.

Daily and hourly charts

The lower wick attached to today’s candle (above left) represents a failure on the part of the bears to keep the cryptocurrency below the 100-day MA. The average also proved a tough nut to crack on Wednesday.

The repeated defense of the key MA, coupled with the bullish divergence (higher lows) of the hourly chart relative strength index (above right) indicates scope for a rise to $10,300 over the next few hours.

The path of least resistance, however, will remain to the downside as long as prices are held below $10,956 – the bearish lower high created on Aug. 20.

The bulls will likely have a tough time forcing a break above $10,956, as the daily chart indicators are biased bearish. For instance, the RSI is holding below 50 and the moving average convergence divergence (MACD) histogram is printing negative values.

Further, the 5- and 10-week moving averages have produced a bearish crossover, as discussed earlier this week.

The fact that last week’s bounce from the 100-day MA ended up charting a bearish lower high indicates a weakening of bullish sentiment.

4-hour chart

The case for a drop to the Aug. 15 low of $9,467 put forward by the rising wedge breakdown will remain valid as long as prices remain below $10,807 – the high of the candle confirming the breakdown.

Daily line chart

The line chart of daily closing prices helps investors look through the noise created by daily highs and lows.

If prices close above $10,000 today and end up rising above $10,927 (Aug. 16 close) in the next day or two, then a double-bottom bullish breakout would be confirmed. That would open the doors to $11,850.

Weekly chart

BTC has failed at least four times in the last eight weeks to close (Sunday, UTC) above $12,000. So, a weekly close above that level is needed to confirm a complete bullish revival.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View



OhNoCrypto

via https://www.ohnocrypto.com

Omkar Godbole, Khareem Sudlow