Bitcoin
$42,580.39+1.89%
Ethereum
$2,911.71+2.02%
XRP
$0.941272+2.10%
Cardano
$2.37+7.69%
Polkadot
$30.57+2.02%
Stellar
$0.279555+1.25%
Dogecoin
$0.208225+1.02%
Chainlink
$22.82+1.91%
Uniswap
$19.56+1.27%
Cosmos
$40.69+5.45%
Polygon
$1.13+0.52%
Algorand
$1.76-1.16%
Litecoin
$151.40+2.81%
Bitcoin Cash
$514.47+2.20%
Wrapped Bitcoin
$42,602.87+1.48%
The Graph
$0.685558+0.42%
Filecoin
$62.09-1.54%
Tron
$0.091499-0.44%
Ethereum Classic
$47.58+2.86%
Tezos
$7.12+17.24%
Aave
$278.36+0.43%
Monero
$238.71+3.26%
NEO
$39.47+1.00%
EOS
$4.03+1.39%
IOTA
$1.24-0.81%
BitTorrent
$0.003263+1.15%
Bitcoin SV
$135.08+0.64%
Waves
$24.41-5.98%
Maker
$2,274.55-0.01%
Dash
$166.45+1.76%
Decred
$117.30+3.93%
Decentraland
$0.690082+1.70%
ICON
$1.57+1.22%
NEM
$0.148394+1.19%
Zcash
$110.87+1.94%
OmiseGO
$8.90+0.31%
Paxos Standard
$1.00+0.03%
Ren
$1.14+14.85%
Yearn Finance
$29,958.12+5.46%
NuCypher
$0.276319+2.73%
Bitcoin Gold
$54.46+3.92%
Qtum
$9.77+0.74%
Basic Attention Token
$0.649000+2.17%
Fetch.ai
$0.812440+5.07%
0x
$0.905492+2.24%
Kava.io
$6.04+6.07%
Bancor
$3.44+1.46%
Band Protocol
$7.49+1.88%
Siacoin
$0.014864+1.09%
Nano
$4.77+1.13%
Loopring
$0.381935+1.20%
Storj
$1.09+2.04%
Numeraire
$41.90+3.79%
Civic
$0.458709-0.55%
Lisk
$2.99+6.06%
Orchid
$0.319809-0.40%
PAX Gold
$1,759.11+0.36%
Augur
$22.15+6.90%
Enzyme
$132.75+1.95%
Aragon
$4.83+5.19%
district0x
$0.151957+3.88%
Kyber Network
$1.44+2.03%
SingularDTV
$0.001283+1.13%
Tether
$1.00+0.02%
USD Coin
$1.00+0.03%
Dai
$1.00+0.03%

Bitcoin Eyes $10K, But Charts Hint at Bull Trap Potential

Bitcoin's corrective rally from Friday's low of $8,371 seems to have legs, but gains above $10,000 may be transient.

Mar 12, 2018 at 10:20 a.m. UTC
Updated Sep 14, 2021 at 1:54 p.m. UTC

Bitcoin (BTC) is solidly bid on the first trading day of the week, but a move above $10,000 could turn out to be a bull trap, the technical charts indicate.

Having hit a 3.5-week low of $8,371 on Friday, bitcoin prices traded in a sideways manner in the range of $8,400 to $9,400 over the weekend, according to CoinDesk's Bitcoin Price Index. As of writing, BTC is seen at $9,885, and is up 13 percent in the last 24 hours, as per CoinMarketCap.

Despite the 14 percent recovery from Friday's low of $8,371, it's too early to call a bullish trend reversal, given that BTC is still down at least 18 percent from recent highs above $11,660.

Further, the price action over the weekend is indicative of short-term bear market exhaustion. For instance, on the Bitfinex exchange, bitcoin closed (as per UTC) below the 200-day moving average (MA) on Saturday for the first time since Feb. 5.

Daily chart

However, despite the bearish daily close, BTC avoided a break below Friday's low of $8,342 and actually ended up creating a bullish "outside day" candle on Sunday. Prices also closed (as per UTC) above the 200-day MA.

A bullish outside day candle occurs when the candle has a higher high and a lower low than the previous day's candle, indicating that the bulls have taken over from the bears.

Also, the symmetrical triangle breakout seen on the 1-hour chart below supports the idea of short-term bear market exhaustion.

1-hour chart

The above chart (prices as per Bitfinex) shows:

  • An upside break of the triangle pattern adds credence to the bullish outside day candle (seen on the daily chart) and indicates scope for a rally to $10,134 (10-day MA) and $10,371 (weekly 10-MA).
  • The 50-hour MA and 100-hour MA have bottomed out (shed bearish bias).
  • Over the last 14 hours, BTC seems to have formed a base around $9,400, possibly indicating the foundations of the next step higher towards $10,000 have been built.

However, the setup on the weekly chart indicates the rally to $10,000–$10,300 could turn out to be a bull trap.

Weekly chart

The above chart (prices as per Bitfinex)-

  • BTC created a bearish "outside-week" candle – i.e. last week's high and low overshadowed the price action of the previous week – indicating the rally from the Feb. 6 low of $6,000 has ended at $11,700 and the bears have regained control.
  • The 10-week MA is trending lower, indicating bearish setup.
  • The relative strength index (RSI) failed to beat the resistance at 53.00–55.00 and has rolled over in favor of the bears.

View

The hourly chart favors a rally to $10,000–$10,300. A daily close (as per UTC) above the 10-day MA (seen today at $10,134) would confirm a bullish outside day reversal and open doors for re-test of $10,980–$11,000. However, the gains will likely be transient as suggested by the weekly chart.

Meanwhile, a break below last week's low of $8,342 would open doors for re-test of monthly 50-MA, currently located at $6,339.

Only a weekly close above $11,700 would signal a bullish reversal and shift attention to $17,000.

Trap image via Shutterstock

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Loading...