Bitcoin (BTC) has a solid offer on the first trading day of the week, but a move above $ 10,000 could become a trap for the bull, technical charts indicate.
Having reached a minimum of 3.5 weeks of $ 8,371 on Friday, bitcoin prices were traded sideways in the range of $ 8,400 to $ 9,400 over the weekend, according to the Bitcoin price index. At the time of writing, BTC looks at $ 9,885, and has risen 13 percent in the last 24 hours, according to CoinMarketCap.
Despite the 14 percent recovery from Friday’s low of $ 8,371, it is too early to call for a bullish reversal, given that BTC is still down at least 18 percent from recent highs above $ 11,660.
In addition, the action of the price during the weekend is indicative of the exhaustion of the bear market in the short term. For example, in the Bitfinex exchange, bitcoin closed (according to UTC) below the 200-day moving average (MA) on Saturday for the first time since February 5.
However, despite the bearish daily close, BTC avoided a break below Friday’s low of $ 8,342 and actually ended up creating a bullish candle for “outside day” on Sunday. Prices also close (according to UTC) above the 200-day MA.
A bullish candle of the outer day occurs when the candle has a higher stop and a lower low than the previous day’s candle, indicating that the bulls have taken over the bears.
In addition, the symmetrical break of the triangle seen in the 1-hour chart below supports the idea of short-term bear market depletion.
The box above (prices according to Bitfinex) shows:
An upward break of the triangle pattern adds credibility to the bullish candlestick of the day outside (seen in the daily chart) and indicates the extent of a rebound to $ 10,134 (10 days MA) and $ 10,371 (10-MA weekly).
The MA of 50 hours and the MA of 100 hours have bottomed (they throw a bearish bias).
In the last 14 hours, BTC seems to have formed a base of around $ 9,400, possibly indicating that the basis for the next step towards $ 10,000 has been built.
However, the configuration on the weekly chart indicates that the $ 10,000- $ 10,300 recovery could turn into a bull trap.
The picture above (prices according to Bitfinex) –
BTC created a bearish candle “out of the week” -that is, the high and low of last week overshadowed the price action of the previous week- indicating that the rebound from the February 6 minimum of $ 6,000 has ended in $ 11,700 and the bears have regained control.
The 10-week MA has a lower trend, indicating a bearish configuration.
The Relative Strength Index (RSI) could not overcome the resistance at 53.00-55.00 and has turned in favor of the bears.
The hourly chart favors a rally to $ 10,000- $ 10,300. A daily close (according to UTC) above the 10-day MA (seen today at $ 10,134) would confirm a bullish reversal of the exterior day and open doors for a new test of $ 10,980- $ 11,000. However, the gains are likely to be transitory as suggested by the weekly chart.
Meanwhile, a break below last week’s low of $ 8,342 would open the doors for a new test of 50 MA per month, currently at $ 6,339.
Only a weekly close above $ 11,700 would indicate a bullish reversal and would shift attention to $ 17,000.