Bitcoin is witnessing a minor corrective rally Friday, but the bulls may have a tough time regaining control, the technical charts suggest.
CoinDesk's Bitcoin Price Index (BPI) fell to $9,592.96 at 01:59 UTC – the lowest level for one week. As of writing, the BPI is seen a little higher at $10,090.
It is worth noting that the global average price calculated by CoinMarketCap is holding around $200 higher, largely due to the "Kimchi premium" – that is, BTC is changing hands above $11,000 on Korean exchanges Upbit, Bithumb, and Coinone. Meanwhile, across western exchanges, the world's largest cryptocurrency by market capitalization is trading closer to $10,000.
So, it appears a relief rally has gathered pace, a move indicated by the bullish relative strength index (RSI) divergence seen on the chart (prices as per Coinbase) below.
BTC is stuck inside a falling channel, creating lower lows and lower highs. However, the RSI continues to diverge in favor of the bulls, so the corrective rally could be extended further towards $10,250 (falling channel resistance).
However, only a daily close (as per UTC) above $11,228 (38.2 percent Fibonacci retracement of the sell-off from the record highs), would signal a revival of the rally from Feb. 6 lows below $6,000.
Additionally, as seen in the chart above, the 50-hour moving average (MA), 100-hour MA and 200-hour MA have topped out in favor of the bears. The chart also shows a bearish 50-hour MA and 200-hour MA crossover, as well as a bearish 50-hour MA and 100-hour MA crossover.
- 12-hour view: BTC could rise to $10,250 (falling channel resistance) and possibly to $10,300 (head-and-shoulders neckline resistance), courtesy of the bullish RSI divergence.
- Longer-term gains appear unlikely, though, and BTC looks set to test $8,800 over the weekend.
- A daily close above the 10-day moving average (currently seen at $10,378) would signal bearish invalidation.
- Only a daily close (as per UTC) above $11,228 (38.2 percent Fibonacci retracement of the sell-off from the record highs) would signal a bullish reversal.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
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