After falling out of a consolidation range between $11-13,000 days ago, Bitcoin (BTC) has bounced hard in the last 48 hours from extremely oversold indicators. But after being contained at very tight levels, Bitcoin still needs to confirm its staying power at these levels.
Starting with the 4-hour, we see that yesterday’s bounce has been stopped hard a clutch of resistance levels. These include the resistance level at about $10,600, the 55 exponential moving average (EMA), as well as the critical 200 EMA - critical because it has held up the entire 2019 Bitcoin uptrend.
A massive wave of selling and defense by buyers prompted yesterday’s leg higher on impressive volume. Bitcoin is now holding right at the 9 EMA, with buyers stepping in to keep it there, and there certainly seems to be some commitment to reverse Bitcoin’s short term trend after a short period of correction down to $9k.
The 4-hour indicators do not bad, either. Here we see a clear bull divergence on the recent price peaks, as well as an uptrending MACD after a bullish cross. Histogram peaks are also bullishly diverging with price.
But Bitcoin has some work to do if it wants to stay at these levels. Retaking the 200 and 55 EMAs, and the $11,000 mark will be necessary to resume an upward trajectory in the short term.
Looking on the daily, we see the parameters of a flagging uptrend. A critical RSI mark of 46, held during all of 2019, was briefly lost on the last dip. We can see the 33 EMA, equivalent to the 200 EMA on the 4-hour, has also been lost for the first time.
In a few days, we should understand the longevity of this bounce. For now, Bitcoin’s presence at this level is not really confirmed. Many were expecting a longer retracement to a lower support level - perhaps to the historically relevant 100 moving average (SMA).
What is needed is a daily close above roughly $10,600. This area marks both an important level in the local market structure, and the critical 33 EMA. Until this level is retaken with a daily close, we should not presume that the retracement is over.
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