Hope for Bitcoin as the Cryptocurrency Sets Sight on a New Resistance 

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Bitcoin may be on the road to recovery as it is working its way above the $7500 support zone. If it continues like this, it will test a new resistance at $7,870 within 24 hours according to the technical indicators.

Bitcoin was on a corrective rally yesterday after it created a bullish outside day candle on Tuesday. Unfortunately, the bulls had difficulty absorbing the supply near the 50-candle moving average at $7,550.

Bitcoin has repeatedly failed to beat the moving hurdle and has ended in a downside break of its diamond pattern. There was a sell-off but it ran out of steam at $7,270.

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At the time this piece was written, BTC was trading around $7,535 indicating a 0.6% rise in price within 24 hours. From the look of things, it is going to form resistance at $7,870.

There has been recovery from the $7,270 low up to $7,570 and this established a bullish pattern in addition to Tuesday’s outside day candle. BTC may test supply around $7,870.

The bullish wave in Bitcoin’s price is also an indication that it will soon move above the significant 50 week moving average which is currently at $7,711. The only signal of a bearish invalidation would be a weekly close above this level.

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Irrespective of the bullish setup, traders should be cautious and look out for the significant moving averages which are 50,100, and, 200. There are biased bears on the 4-hour chart.

If the trend continues like this, Bitcoin is going to rise to the $7,870 level within the next 24 hours. If there is a high volume break above this level, the price will retest the 50 day moving average which is currently at $8,522.

The two moving averages are maintaining a bearish bias. If the bulls fail, the price might drop to $6,900. The Bulls need to capitalize to make progress in the market. Traders are not advised to make any long term trading decisions now.

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