Monday, June 18, 2018

Bitcoin In Recovery, If Key Support Holds

Bitcoin (BTC) continues to be in recovery mode, however the bulls should keep costs higher than key support seen slightly below $6,500 to take care of momentum, the technical charts indicate.

The cryptocurrency clocked a high of $6,736 on Bitfinex yesterday amid signs of a bear breather. However, discount hunters were short in provide and costs fell back below $6,600 at 01:00 UTC today. Bitcoin has spent a much better a part of the last seven hours trading within the narrow range of $6,550 to $6,620.

As of writing, BTC is changing hands at $6,590 – up 7.2 % from Wednesday's 18-week low of $6,109.

While it's too early to decision a bottom, the emerging recovery shows promise, with bitcoin holding well higher than the previous support-turned-resistance of $6,425 (April one low).

As per the charts, though, an surprising break below $6,480 may pour cold water on the optimism and signal a start of the sell-off.




The chart shows BTC has created a bear flag – a pessimistic continuation pattern. a break below $6,480 (flag support) would mean the corrective rally from the recent low of $6,109 has concluded and therefore the bear market has resumed.

Such a bear flag breakdown, if confirmed, would enable a sell-off to $5,750 (target as per the measured height technique, i.e. pole height deducted from breakdown price).

That target appearance possible when viewed against the scene of pessimistic long-run technical setup. Further, the 7 % recovery from the recent lows has upraised the relative strength index (RSI) well higher than oversold region (below 30.00) providing scope for additional sell-off.

What's more, the RSI is teasing an opportunity below the ascending trendline (bearish signal).

Clearly, the percentages are high that corrective rally may collapse below $6,480. Meanwhile, the upside is seen gathering traction if BTC finds acceptance higher than the immediate resistance of $6,619 (dotted yellow line within the hourly chart).

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Bear flag breakdown (a move below $6,480) would imply start of the sell-off and will yield a drop to $5,750.

A daily close (as per UTC) below $6,000 (February low) would solely bolster the already pessimistic long-run technicals and open up draw back towards the $5,000 mark.

On the upper aspect, acceptance higher than $6,618 may bring a climb towards resistance settled at $6,900 (June 11 high) and $7,000 (psychological mark).

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