The weekend rally in the bitcoin-U.S. dollar (BTC/USD) exchange rate may have come to a halt at $4,470 on Monday, but bulls appear to be crowding out the weak hands.
The retreat to $4,255 over the last day suggests investors who lack the financial resources to carry their positions have been spooked by minor price changes. While this unwinding of speculative bets could have gathered pace, spreading uncertainty amongst a wider swathe of investors, that outcome now appears unlikely.
Moreover, the overall outlook remains constructive, given there are no signs of stress on the technical charts and indications that the number one cryptocurrency has already digested the bearish regulatory news out of China and South Korea.
Price action analysis today suggests that the digital currency is now ready to pop higher, having taken the 50-day moving average hurdle in a convincing manner over the weekend.
At press time, the digital currency is trading at $4,290 – down 2.85 percent in the last 24 hours. Week-on-week, BTC is up 11.54 percent, while month-on-month, it is still nursing a 7 percent loss.
The golden crossover/bullish crossover – 50-simple moving average cuts the 200-simple moving average from below – adds credence to the rebound from 100-day moving average (repeat of July pattern) followed by a move above the 50-day moving average.
The outlook for the BTC price remains constructive. A break above $4,470 (previous day’s high) would open up upside towards $4,700.
The 10-day moving average is sloping upwards – thus, any pullback is likely to be met with fresh bids.
As for a possible downside, only two consecutive day-end closes below the 10-day moving average would abort the bullish view on bitcoin.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.