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Bitcoin Price (BTC/USD) closes in on $7.4k

By:
on Aug 8, 2018
Updated: Sep 19, 2019
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50-day moving average

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The 50-day moving average (MA), one of the most widely tracked technical indicators, was put to test in the previous two trading days.

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Although, on both occasions, prices failed to penetrate the MA support by the daily close (as per UTC), signalling bearish exhaustion.

Today, BTC is following a similar pattern. The leading cryptocurrency picked up a bid around the 50-day MA support of $6,938 earlier today and rose back above $7,000, raising prospects of a corrective rally.

At press time, BTC is fetching $7,050 on Bitfinex – up 0.7 per cent on a 24-hour basis.

The solid defence of the 50-day MA support and the early signs of bullish reversal, as seen in the short-duration chart below, indicate scope for a stronger rally toward $7,400.

4-hour chart

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Bitcoin

The above chart shows, the current 4-hour candle is hovering above the top end (resistance) of the falling channel (bearish pattern).

A bullish breakout would be confirmed if the candle closes above the falling channel hurdle. In this case, BTC will likely rise toward the downward sloping (bearish) 100-candle MA, currently located at $7,438.

This scenario appears likely as a bullish divergence of the relative strength index (RSI) signals that the tide has turned in favor of a rally.

BTC created a bearish outside-day candle yesterday, meaning the day began with optimism and ended with pessimism. Still, BTC’s strong showing today backs up indications of bearish exhaustion seen yesterday.

While there is a reason to be optimistic, the bulls can’t afford to lower their guard as the 5-day MA and 10-day MAs are still biased toward the bears.

If prices close today (as per UTC) below $6,847 (low of the previous day’s bearish outside-day

BTC risks a deeper drop below $6,700 (rising trendline support) if prices find acceptance below $6,847 (previous day’s low) today.

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