Bitcoin Seeks Bargain Buyers As Price Retreats Back Toward $8K

Bitcoin's $350 drop from two-month highs could be short-lived as investors step in looking for bargains.

AccessTimeIconJul 25, 2018 at 11:30 a.m. UTC
Updated Sep 13, 2021 at 8:12 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin's (BTC) price has seen a $350 drop this morning from Tuesday's two-month highs and may be headed for a short-term correction, technical charts suggest.

As of writing, the leading cryptocurrency is trading at $8,220 on Bitfinex down 3.5 percent from the high of $8,507 reached yesterday.

Today's dip is not surprising and could be extended further as BTC's 40 percent rally from the seven-month low of $5,755 reached on June 24 is still looking overstretched, as per the relative strength index (RSI).

The short duration charts have also aligned in favor of a deeper correction.

However, the bullish reversal has likely revved up investor interest and bargain hunters who missed out on lower prices prior to the rally could step in prevent significant losses.

Hourly chart

btcusd-hourly-4

The 50-hour, 100-hour, and 200-hour moving averages (MAs) are trending north and are located one above the other, indicating the path of least resistance is to the upside. Consequently, these MAs could be the area of interest of the bargain hunter.

As of writing, the 50-hour MA is located at $8,023.

Meanwhile, the 100-hour MA, currently located at $7,736, almost coincides with the rising trendline, thus dip demand could be strong around that level.

Daily chart

btcusd-daily-17

The rising (bullish) 5-day MA and 10-day MA are located at $7,830 and $7,538, respectively. The 100-day MA, which acted as a stiff resistance last week, is seen offering strong support at $7,612.

Clearly, the area between the $7,830 and $7,530 is packed with key moving average lines and could act as a strong support zone.

View

  • BTC is feeling the pull of gravity, courtesy of overbought conditions and a bearish RSI divergence on the hourly chart.
  • Bargain hunters could hit the markets with fresh bids around $8,023 (50-hour MA). A violation there would allow a retreat to the strong support zone of $7,530–$7,830.
  • Should a strong dip demand emerge around the above discussed key levels, then BTC could cross the all-important 200-day MA hurdle of $8,633 in a convincing manner.
  • The short-term outlook remains bullish as long as the 5-day and 10-day MAs are rising.

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

Bitcoin image via Shutterstock; Charts by Trading View

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.


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.