Bitcoin Price Takes a $200 Tumble After Eight-Day Highs

Omkar Godbole
Sep 14, 2018 at 11:00 UTC
Updated Sep 14, 2018 at 19:45 UTC
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Having dropped back from eight-day highs hit this morning, bitcoin (BTC) price could be in for a bout of consolidation before further upside unfolds.

The cryptocurrency rose to $6,596 earlier today on Bitfinex – the highest level since Sep. 6 – adding credence to the short-term bullish reversal signaled by the symmetrical triangle breakout earlier this week.

However, despite the strengthening bullish case, BTC quickly lost around $200 soon before press time. As if writing, BTC is changing hands at $6,450, having printed an intraday low of $6,355 a few minutes ago.

While the sudden price pullback could force investors to question the sustainability of the corrective rally, the short-term technical charts continue to show that the path of least resistance is on the higher side.

Hourly chart

BTC’s retreat from the highs near $6,600 is likely associated with the bearish divergence of the relative strength index seen in the hourly chart.

Indeed, the RSI has adopted a bearish bias, but it is premature to call an end of the technical recovery, as the major moving averages (MAs) – 50-hour, 100-hour, and 200-hour – are still trending north in favor of the bulls

More importantly, the key MAs are capping the downside at press time. This leaves scope intact for a recovery to resistance at $6,800 (multiple daily highs).

Daily chart

On the daily chart, BTC closed (as per UTC) above the 10-day MA yesterday, neutralizing the bearish view put forward by the rising wedge breakdown on Sept. 5.

However, the short-term MA is still sloping downwards. This, coupled with the bearish RSI divergence on the hourly chart could keep the cryptocurrency range-bound for the next 24 hours or so.

It’s worth noting that technical recovery usually gathers speed after the short-term MAs bottom out – unless, of course, there is a major positive fundamental news.

View

  • BTC has retreated from eight-day highs, but the technical recovery is still intact.
  • The cryptocurrency could consolidate around $6,400 in the next few hours before resuming the journey towards $6,800.
  • A UTC close below the trendline connecting the June low and Aug. 11 low would put the focus back on the rising wedge breakdown witnessed earlier this month and could yield a drop below $6,000 (February low).

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; Charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.