Correction Coming? Bitcoin Retreats After $17k High

Bitcoin prices are taking a hit in the early U.S. session today, after a record spike to over $17,000 yesterday.

AccessTimeIconDec 8, 2017 at 12:00 p.m. UTC
Updated Sep 14, 2021 at 1:55 p.m. UTC
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Bitcoin prices are suffering this morning, following a record spike to over $17,000 overnight.

As per CoinDesk's Bitcoin Price Index (BPI), the cryptocurrency looked set to revisit the new high of $17,364 hit yesterday at 16:29 UTC, but ran out of steam at $17,153.94 at 1:59 UTC.

Since then, however, bitcoin has taken a sharp downturn and was last trading at $14,794 levels at time of writing – a drop of close to $2,500 since yesterday's high.

BTC has appreciated close to 150 percent over the last five weeks on speculation that a move to the mainstream via an entrance to the futures contracts market would increase demand for the cryptocurrency. That's even though the institutional money would be chasing the synthetic derivatives that seldom impact the underlying asset (bitcoin).

Further, as CoinDesk reported, the world's largest investment banks believe the financial system is ill-prepared for the launch of bitcoin futures and have called for a postponement of the listings.

Currently, it looks like the markets may be heeding the warning. Having shown signs of exhaustion near record highs earlier today, the sell-off is picking up pace and BTC is now down over 12 percent for the session, as per the BPI.

The price chart analysis also indicates that the odds of a technical correction have increased over the last 24 hours.

Bitcoin chart


On the above chart:

  • The 5-day and 10-day moving averages (MAs) are curled upwards in favor of the bulls.
  • The rising trend line (red) is seen offering support around $10,000 levels.
  • The stochastic has turned lower from the overbought territory.
  • The relative strength index (RSI) has formed a top, but is yet to cut 70.00 levels from above (i.e. turn lower from the overbought region).

As noted yesterday, historical data show bitcoin price suffers a notable technical pullback only on confirmation of a bearish price-RSI divergence and/or if the RSI and stochastic move lower from the overbought territory.

There is no evidence yet of a bearish price-RSI divergence, but the stochastic has moved lower from the overbought territory (marked by circles). A correction could gather pace once the RSI also breaks below 70.00 levels.

1-hour chart


The above chart shows:

  • Rounding top pattern – formed at the end of an extended upward trend and indicates a reversal in the long-term price movement. A break below $15,142 (rounding top neckline) would open the doors for a move to $12,500 levels.
  • The rounding top adds credence to the overbought conditions shown by the daily RSI and stochastic.


  • BTC could suffer a pullback to sub-$10,000 levels.
  • The upward sloping nature of the 10-day MA indicates the dips below $10,000 could be short-lived, however.
  • On the higher side, $18,261 and $18,399 are key resistance levels.

Pencil and eraser image via Shutterstock


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