Bitcoin Rally Stalls But Bull Revival Isn’t Yet Ruled Out
Bitcoin’s failure to find acceptance above the $11,000 mark this week has neutralized the immediate bullish outlook. However, the rally from Feb. 6 lows could resume if prices break above $11,250, the technical charts indicate.
As of writing, CoinDesk’s Bitcoin Price Index (BPI) is seen at $10,345 – down 6 percent in the last 24 hours. The BPI closed (as per UTC) above $11,000 on Feb. 17, but has since struggled to maintain the bullish momentum.
So, it appears the rally from the Feb. 6 low of $5,947 has run out of steam. Further, the BPI chart also shows a bearish reversal pattern.
The price action of the last two days confirms a bearish doji reversal. Bitcoin (BTC) clocked a three-week high of $11,767 on Tuesday, but closed (as per UTC) with minor gains at $11,228.24, resulting in a “gravestone doji” candlestick pattern (marked by arrow). Additionally, BTC fell more than 6 percent yesterday, marking a bearish follow-through to the gravestone doji.
Overall, the pattern indicates a short-term bullish-to-bearish trend change.
As seen on the chart (prices as per Coinbase) above, the rally has stalled at the confluence of the 50-day moving average (MA) and the 38.2 percent Fibonacci retracement of the sell-off from the record highs.
Hence, $11,228 (38.2 percent Fibonacci retracement) is the key resistance to watch out for. Only a daily close (as per UTC) above that level would revive the bullish outlook.
– BTC’s rally from the Feb. 6 lows below $6,000 seems to have run out of steam.
– Despite the bearish RSI divergence and the bearish doji reversal, it is still too early to call a top as the 10-day MA is curled up in favor of the bulls.
– That said, a daily close (as per UTC) below the 10 -day MA would boost the odds of a move lower to $9,181 (23.6 percent Fibonacci retracement).
Bullish scenario: A daily close above $11,228 would mean the rally from the recent lows below $6,000 has resumed. In such a scenario, attention would shift to $14,537 (61.8 percent Fibonacci retracement).