Bitcoin seems ready for a minor rally, having defended a key moving average support in the last 72 hours, indicate the technical charts.
The 50-day moving average (MA), one of the most outlined technical indicators, was put to the test on the two previous trading days. However, on both occasions, prices failed to penetrate MA support on a daily basis (as per UTC), signaling a bearish exhaustion.
Today is not different. The main cryptocurrency has collected an offer around the 50-day MA support of $ 6,938 previously and has risen above $ 7,000, increasing the prospects of a corrective rally.
At the time of printing, BTC is changing hands to $ 7,050 on Bitfinex – up 0.70% on a 24-hour basis.
The solid defense of the 50-day MA support and the first signs of bullish reversal, as shown in the short-term table below, indicate the possibility of a stronger rally towards $ 7,400.
The graph above shows that the current 4-hour candle hovers above the upper end (resistance) of the falling channel (bearish model).
An upward break would be confirmed if the candle closes above the obstruction of the falling channel. In this case, BTC will probably increase towards the 100 candlestick (MA) MA, currently located at $ 7,438.
This scenario appears more likely because the bullish divergence of the relative strength index (RSI) is signaling that the tide has turned in favor of the bulls.
Yesterday, BTC created a candle a day bearish, which means that the day began with optimism and ended with pessimism. However, BTC managed to defend the 50-day MA today, indicating that the bears were probably stranded.
Overall, there's a reason to be optimistic, even if the bulls can not afford to lower their guards as short-term MAs are biased towards bears: 5-day and 10-day MA they are trending south.
Sales of the July high of $ 8,507 will resume, sending BTC below the rising trend line if prices close today (as per UTC) below $ 6,847 (minimum printed from the candle outside the day of the previous day).
- BTC looks set to eliminate falling channel resistance and could rise to $ 7,400 in the next 24 hours, courtesy of the failure of the bear to the 50-day MA support and the bullish divergence of the crisis. RSI
- BTC risks a deeper fall below $ 6,700 (increase in support for the trend line) if prices are accepted below $ 6,847 (previous day's low).
Disclosure: The author does not hold cryptocurrency assets at the time of writing.
Image of the tunnel via Shutterstock; Graphs of Trading View
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