Bitcoin’s failure to find acceptance above the $11,000 mark this week has neutralized the immediate bullish outlook. However, the rally from Feb. 6 lows could resume if prices break above $11,250, the technical charts indicate.
As of writing, CoinDesk’s Bitcoin Price Index (BPI) is seen at $10,345 – down 6 percent in the last 24 hours. The BPI closed (as per UTC) above $11,000 on Feb. 17, but has since struggled to maintain the bullish momentum.
So, it appears the rally from the Feb. 6 low of $5,947 has run out of steam. Further, the BPI chart also shows a bearish reversal pattern.
The price action of the last two days confirms a bearish doji reversal. Bitcoin (BTC) clocked a three-week high of $11,767 on Tuesday, but closed (as per UTC) with minor gains at $11,228.24, resulting in a “gravestone doji” candlestick pattern (marked by arrow). Additionally, BTC fell more than 6 percent yesterday, marking a bearish follow-through to the gravestone doji.
Overall, the pattern indicates a short-term bullish-to-bearish trend change.
As seen on the chart (prices as per Coinbase) above, the rally has stalled at the confluence of the 50-day moving average (MA) and the 38.2 percent Fibonacci retracement of the sell-off from the record highs.
Hence, $11,228 (38.2 percent Fibonacci retracement) is the key resistance to watch out for. Only a daily close (as per UTC) above that level would revive the bullish outlook.
The observed bearish RSI divergence (higher highs in price and lower highs on the relative strength index) also indicates a short-term bearish trend reversal.
- BTC’s rally from the Feb. 6 lows below $6,000 seems to have run out of steam.
- Despite the bearish RSI divergence and the bearish doji reversal, it is still too early to call a top as the 10-day MA is curled up in favor of the bulls.
- That said, a daily close (as per UTC) below the 10-day MA would boost the odds of a move lower to $9,181 (23.6 percent Fibonacci retracement).
- Bullish scenario: A daily close above $11,228 would mean the rally from the recent lows below $6,000 has resumed. In such a scenario, attention would shift to $14,537 (61.8 percent Fibonacci retracement).
This article was originally published by CoinDesk