Bitcoin (BTC) has made a 6 percent recovery from the 90-day reduced hit on Wednesday, neutralizing the immediate bearish outlook.
The leading cryptocurrency fell to $6,108 at around 16:30 UTC yesterday on Bitfinex — its lowest level since Feb 6 — bolstering the already oversold conditions shown by the daily relative strength index (RSI) yesterday.
Therefore, the subsequent recovery to $6,500 levels now is hardly surprising and indicates that bitcoin could have located a temporary bottom around $6,100. Nevertheless, long-run technical deployment stays bearish and the battered bulls will want to see a stronger proof of bear exhaustion before hitting the market with fresh bids.
Consequently, the market could stay directionless over the next 48 hours and deal seekers might chip in later if the cryptocurrency looks steady around $6,500.
While costs fell to $6,108 yesterday, the RSI generated a higher low, signaling a bullish divergence.
Therefore, the stage is set for a corrective rally, even though the upside is seen gathering steam only if bitcoin manages to hold above $6,425 (Apr 1 reduced ) for next twenty five hours. In this example, a move toward $7,000 becomes more of a possibility, or as high as the falling station immunity, currently located at $7,380.
Which will be harder in practice, however, as the moving averages (MAs) are still biased bearish — the 50-candle, 100-candle and 200-candle MAs are all trending southwest, indicating a bearish setup.
The daily moving averages (5-day and 10-day) seen here are pointing south, and also the broader outlook remains bearish as long as bitcoin is trapped within the falling station.
Currently, BTC is having a tough time crossing the 5-day MA, now located at $6,857.
Bargain hunters will probably enter the market following the short-term moving averages have bottomed out.
While charts show early indications of bear exhaustion, the long-term outlook is still poor for the bulls, as indicated from the pennant breakdown and the bearish crossover between 5-month and 10-month MAs.
BTC appears to have made a temporary reduced in $6,109 and may trade sideways at the next 48 hours approximately.
The probability of a corrective rally to $7,000 and above would increase if the purchase price holds above $6,425 (Apr 1 reduced ) for the next twenty five hours.
Bearish scenario: Repeated failure to hold above $6,425 despite the bullish price RSI divergence (seen in 4-hour graph ) might yield a drop to $6.000. A daily close (as per UTC) below that amount would open downside towards the $5,000 mark.
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