Bitcoin Claws Back to $10k: Can Bulls Turn the Tide?
The bitcoin price is entering sideways trading, but a break above $10,000 could signal a rally back to all-time highs.
Dec 1, 2017 at 12:00 p.m. UTC
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Bitcoin could be in for a weekend of sideways trading, price action analysis suggests.
Despite the high volume retreat from a record price above $11,300, the world's largest cryptocurrency by market capitalization has been able to avoid a break below the $9,000 mark.
The cryptocurrency was last seen trading at $10,040. As per CoinMarketCap, bitcoin (BTC) is trading unchanged on the day.
Comments on social media indicate the investor community feels bitcoin may have topped out above $11,000 for now and a healthy correction would shake out the weak hands, thereby opening doors for a more sustained rally to new record highs.
That said, the price chart analysis seems to suggest a consolidation is more likely to be the name of the game in the short-run.
4-hour chart
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The above chart shows:
- The follow-through to bearish doji reversal has been weak (bears have not been able to cut through the low of the big red candle sitting next to doji).
- The rising trend line is intact, and the 50-moving average (MA), 100-MA, and 200-MA are sloping upwards in favor of the bulls.
- Volumes have dropped (as shown by the falling trend line on volume bars), indicating the pullback is nothing more than a healthy correction.
- The relative strength index (RSI) is bottoming out.
All considered, odds are high that bitcoin holds around $10,000.
However, that does not necessarily mean fresh record highs are in the offing today. The daily chart shows strong signs of bull market exhaustion or indecision at record highs.
Bitcoin chart
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The above chart shows:
- Two consecutive doji candles, which indicate indecision in the marketplace.
- The RSI shows overbought conditions.
STORY CONTINUES BELOW
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- A consolidation around $10,000 (+$1,000/-$1,000) is likely over the next 24 to 36 hours.
- Bullish scenario: Consolidation around $10,000 for the next 24 to 36 hours, followed by 1-hour close above $10,850 on the back of stronger volumes would open doors for a rally to fresh record highs.
- Bearish scenario: A close below the rising trend line could yield a deeper sell-off to $7,800, although the upward sloping 10-day MA indicates the dip could be short-lived.
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