Yahoo Finance Bitcoin Prices Stabilize Above $6K – But Will They Stay?
Bitcoin (BTC)Â has made a 6 percent recovery from the 90-day low hit on Wednesday, neutralizing the immediate bearish outlook.
The leading cryptocurrency fell to $6,108 at around 16:30 UTC yesterday on Bitfinex â its lowest level since February 6 â bolstering the already oversold conditions shown by the daily relative strength index (RSI) yesterday.
Hence, the subsequent recovery to $6,500 levels currently is hardly surprising and indicates that bitcoin may have found a temporary bottom around $6,100. However, long-run technical setup remains bearish and the battered bulls will want to see stronger evidence of bear exhaustion before hitting the market with fresh bids.
Things I Did... Bitcoin Braces for Bear Market With Feel-Good Tweets
Consequently, the market could remain directionless over the next 48 hours and bargain hunters may chip in later if the cryptocurrency looks stable around $6,500.
4-hour chart
While prices fell to $6,108 yesterday, the RSI created a higher low, signaling a bullish divergence.
So, the stage is set for a corrective rally, although the upside is seen gathering steam only if bitcoin manages to hold above $6,425 (April 1 low) for next 24 hours. In this case, a move toward $7,000 becomes more of a possibility, or even as high as the falling channel resistance, currently located at $7,380.
Sell-Off Over? Bitcoin's RSI Just Hit Its Lowest Level Since 2016
That will be easier said than done, though, as the moving averages (MAs) are still biased bearish â the 50-candle, 100-candle and 200-candle MAs are all trending south, indicating a bearish setup.
Daily chart
The daily moving averages (5-day and 10-day) seen here are also pointing south, and the broader outlook remains bearish as long as bitcoin is trapped inside the falling channel.
Currently, BTC is having a tough time crossing the 5-day MA, currently located at $6,857.
Bargain hunters will likely enter the market after the short-term moving averages have bottomed out.
While charts show early signs of bear exhaustion, the long-term outlook is still poor for the bulls, as indicated by the pennant breakdown and the bearish crossover between 5-month and 10-month MAs.
View
BTC seems to have made a temporary low at $6,109 and may trade sideways in the next 48 hours or so.
The probability of a corrective rally to $7,000 and above would rise if the price holds above $6,425 (April 1 low) for the next 24 hours.
Bearish scenario: Repeated failure to hold above $6,425 despite the bullish price RSI divergence (seen in 4-hour chart) could yield a drop to $6.000. A daily close (as per UTC) below that level would open up downside towards the $5,000 mark.
Scales image via Shutterstock
