After posting +4.5% gains last week, Bitcoin price has shed most of those gains early this week with selling-off -3.17% the last 24HRs. We take a look at Bitcoin technical analysis below to see why the sell-off seems to be natural price action at this point
BTC Price Action
As mentioned above, bitcoin had momentum last week posting +4.5% gains. In the scheme of things, it still underperformed a majority of the altcoin markets last week, but investors / traders were intrigued recently when Bitcoin price accelerated through $10,000 levels. Bitcoin price recently tested $10,083 levels before dropping off and rejecting a solid resistance level. As we mentioned in a previous bitcoin price analysis, it was projected that bitcoin would test $10,100 levels which it nearly did in the short-term.
Bitcoin Technical Analysis
After $10,100 levels were essentially touched and rejected, btc price sold off and currently trades around $9,700 during the creation of this article. It seems like many investors / traders thought this signified a “bull trap”, meaning it was a fabricated rally. This doesn’t seem to be the case. Opposed to being an invalid rally, bitcoin technical analysis right now actually shows normal price action. Below we share a couple indicators to build that narrative.
Bitcoin Moving Average ( 200 Day ) : As you can see from the chart above, Bitcoin price is still building stability above the 200 day moving average level ( red line ). The longer Bitcoin price holds this level, the stronger the sentiment to the upside. Bitcoin price still has room to sell-off a bit more without dipping below that level. If btc price were to dip below the 200 day moving average, then the outlook would shift drastically. As of now, as long as btc price stays above the 200 MA, any sort of short-term sell off can constitute normal price action.
Support Zone: If you take a look at historical btc price action, you will see that Bitcoin price has rallied off this level multiple times. You can see on the chart both August and September. In both scenarios, btc price rallied pretty hard off this level. In other words, if Bitcoin price dipped before $9,400 it would be a bearish signal, but as of now it still appears to be normal price action and not a “bull trap.”
Bitcoin Price Prediction Short Term
In the short term, if bitcoin price does not dip below $9,400, it seems like momentum is still pointing north. Retesting and trading above the initial $10,100 level would be key to further ague the $11,000 test on the upside. The recent rally caused the cryptocurrency to reach “overbought territories.” It needed to cool off, and still might need to dip a bit lower before bouncing off support and starting the 2nd surge.
Image Source: Pixabay