Bitcoin (BTC) is functioning its way by means of the essential provide zone above $7,500 and could test resistance at $7,870 in the next 24 hours, the technical charts indicate.
The cryptocurrency looked primed for a corrective rally yesterday, having created a bullish outdoors-day candle on Tuesday. However, the bulls had a challenging time absorbing supply around 50-candle moving typical (MA) on the four-hour chart, located yesterday at $7,550.
The repeated failure to beat the moving average hurdle ended in a downside break of the diamond pattern. The subsequent sell-off ran out of steam at $7,270, and led to a convincing move above the 50-candle MA, noticed right now at $7,441.
As of writing, BTC is altering hands at $7,535 on Bitfinex, up .six % more than 24 hours, and looks set to test the falling trendline resistance positioned at $7,870.
The recovery from $7,270 to $7,570 has established a larger low (bullish pattern), which adds credence to Tuesday’s bullish outside-day candle and bullish cost-relative strength index (RSI) divergence.
Hence, BTC could test supply around $7,870 &ndash resistance of trendline sloping downwards from the Might 6 high and Might 21 high.
It also implies the cryptocurrency will most likely peep above the all-crucial 50-week MA, at the moment situated at $7,711. Even so, only a weekly close (Sunday’s close as per UTC) above that level would signal bearish invalidation.
As seen in the chart above, the final weekly candle had closed below the 50-week MA for the 1st time because October 2015, in theory indicating the end of the extended-term bull run.
Regardless of the bullish set up, there is merit in being cautious as the key moving averages &ndash 50, 100 and 200 &ndash on the four-hour chart are also biased to the bears, as is the ten-day MA.
Archery target image via Shutterstock
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Published at Thu, 31 Could 2018 09:20:49 +0000