Bitcoin has shown signs of recovery following the January 17th dip under $10,000. However, the recovery seems to have stalled, with a brief push above $12,000 being countered by another dip. At the time of writing, trading is at just over $11,500.
Dipping Below 100-Day MA
The rise to $12,500 now looks like an oversell, as it was swiftly followed by a dip below the 100-day MA. While BTC has now gone back above the line, analysis shows that the price will need to hold at over $12,500 to resist a potential slump.
Source – Coinmarketcap.com
Above, you can see the recovery, complete with the corrective dip in the last 24 hours. Now, take a look at the dip below the 100-day MA.
Source – Coindesk.com (created with TradingView)
Now, a strong downward slope on the 5 and 10-day MAs suggest that further falls are likely, especially if BTC fails at $12,500. Support at around the $10000 mark (50% Fibonacci retracement) would indicate that BTC has found its bottom, but a 61% retracement of the 2017 rally would indicate that the price could head as low as $8000 in the hands of a bearish market.
However, previous rallies have proven successful, as can be seen in the graphic above. So, the best course of action would be to wait and see if BTC can hold at a level of above $12,500 for consecutive trading closes before selling or looking ahead to an $8,000 point of entry.
Disclaimer: Analysis based on Fibonacci retracements may not be accurate in such a volatile market. These are the opinions of Bitrazzi alone, and do not constitute advice.
What do you see ahead for Bitcoin the coming week or two? Will it hold above the 100-day MA? Let us know in the comments below.