Today marks the first trading day of the week and Bitcoin seems to be solidly bid pushing up to almost $10,000.
After hitting a 3.5-week low of about $8,371 last Friday, Bitcoin seems to have traded sideways from around $8,400 to $9,400 during the weekend. As at the time this piece was written, Bitcoin was trading $9,885. This also indicated a 13% improvement within 24 hours in the CoinMarketCap.
Is There Going To Be A Bullish Reversal?
Although the recovery from Friday is high, it’s still too early for anyone to call a trend reversal since Bitcoin is still at least 18% down from its all-time highest of $11,660.
The price action this weekend also indicates short term exhaustion in the bear market. For example, on Bitfinex exchange, BTC closed below a pre-conceived 200-day moving average on Saturday. This is the first time it is happening since February 5th.
Irrespective of the rather bearish daily close, Bitcoin didn’t go below Friday’s low of $8,342. In fact, it created a bullish close on Sunday which was above the 200-day moving average. This happens anytime the candle has a lower low or higher high than the candle of the previous day. It is one of the indicators that the bears are surrendering to the bulls.
Last week, BTC created what is referred to as a bearish candle (outside week). The lows and highs last week overshadowed the previous week’s price action. This showed that the bears regained control. The 10-week moving average is trending lower. This indicates a bearish setup. The relative strength index failed and became in favor of the bears.
Considering the analysis, Bitcoin needs to trade higher at least $11,700 before a bullish reversal can occur. Going close to $10,000 isn’t enough.