A CoinDesk analysis by Omkar Godpole was updated at 19:45 UTC on Friday. The price hit 8-day highs on Friday morning but then dropped back. There could be a stretch of consolidation before a further trend. The price hit a high of $6,596 earlier Friday before dropping back. This was the highest level since September 6. The high added credibility to the short-term bullish reversal indicated by the symmetrical triangle breakout earlier in the week.
Even though the bullish case was strengthening BTC dropped about $200 quickly. As the article went to press, BTC was trading at $6,450 up from the intraday low of $6,355. The sudden drop might lead investors to question whether the corrective rally is sustainable but charts show the path of least resistance is still upward.
BTC’s retreat from the highs near $6,600 is likely associated with the bearish divergence of the relative strength index (RSI) evident in the daily chart. The RSI has a bearish bias. However, this is offset by the 50-hour, 100-hour, and even 200-hour moving averages (MA) still bullish in spite of the RSI being bearish.
At press time, the key MAs are capping the downside, leaving scope for a recovery back to the resistance level of $6,800.
The chart shows BTC above the 10-day MA yesterday and this neutralizes the bearish view indicated by the rising wedge breakdown that happened back on September 5. But the short-term MA is still sloping to the downside and this could keep the BTC price range-bound for the next 24 hours or so. A technical recovery often picks up speed after short-terms moving averages bottom out.
Based on his analysis, Godpole’s view is: “BTC has retreated from eight-day highs, but the technical recovery is still intact. The cryptocurrency could consolidate around $6,400 in the next few hours before resuming the journey towards $6,800. A UTC close below the trendline connecting the June low and Aug. 11 low would put the focus back on the rising wedge breakdown witnessed earlier this month and could yield a drop below $6,000 (February low).”
Bitcoin opened Saturday below $6,500 at $6,492. About an hour into the day there was a sudden drop that bottomed out at $6,353 but there was an equally quick recovery with the high so far today being $6,566. At 18:29 UTC the price was at $6,542. Most of the day the price has traded within a narrow range a bit above $6,400 but otherwise showing the consolidation that Godpole suggested. Perhaps tomorrow the price will continue upward. The present price of BTC can be found here