Bitcoin Price Defends $8K But Pullback Still in Play
Bitcoin remains on the hunt for a bullish move over $8,400 after recovering from a sharp overnight dip.
Bitcoin (BTC) remains on the hunt for a major bullish breakout after bouncing back from an overnight dip.
Prices hit a four-day low of $7,823 yesterday reportedly due to whale dumping over $50 million-worth of the cryptocurrency in one Bitfinex trade. The news that New York's attorney general is taking a closer look at major cryptocurrency exchanges operating in the state may also have dampened the bull mood.
The sudden price drop raised the possibility that the rally from the April 1 low of $6,425 had run out of steam.
However, BTC's sharp return from $7,873 to $8,160 this morning established the area around $7,800 as a strong support level and indicates a strong dip-demand mentality in the market. For the second time in the last three days, a dip below the $8,000 mark was quickly undone.
The recovery witnessed this morning adds credence to the bullish moving average studies.
As of writing, BTC is trading at $8,090 on Bitfinex – largely unchanged on a 24-hour basis.
The bullish crossover between the 50-day moving average (MA) and the 200-day MA favors the bulls. Note that BTC has also cut through the descending trendline.
More importantly, the recovery from the low of $7,823 to $8,168 signals a bearish pattern failure – that is, BTC witnessed a head-and-shoulders breakdown (bearish reversal) yesterday, seemingly signaling the rally from $6,815 had ended, however, there was no bearish follow-through.
The price action indicates that bitcoin could challenge the resistance zone of $8,350–$8,420 seen in the daily chart below.
The descending trendline resistance has sloped lower to $8,350, while the 50-day MA has shifted lower to $8,416.
The 10-day MA continues to slope upwards in favor of the bulls and is currently seen at $7,674.
- BTC will likely test supply around $8,400 in the next 24 hours. A high volume close (as per UTC) above that level would signal a long-term bearish-to-bullish trend change.
- On the downside, $7,870 (today's low) is the key level to watch out for. BTC's failure to defend the key support level could yield a pullback to $7,510 (former resistance turned support).
- Only a daily close below the ascending (bullish biased) 10-day MA would indicate the rally from the low of $6,425 has ended.
Bull image via Shutterstock
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. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.