Bitcoin (BTC) Bounces Off of Lows
The bounce off of 1-week lows seen Tuesday may have helped bitcoin (BTC) avert a bigger sell-off.
The leading cryptocurrency by market cap established a Bearish lower-high pattern at $4,400 last week and closed well below $4,000 Monday, confirming an end of the corrective bounce.
As a result, BTC was on the defensive early Tuesday, with prices hitting a 1-week low at $3,730, before bouncing back to near $4,000.
The quick recovery from the low mark may indicate that sellers are reluctant to step in at current marks and could be exhausted, having pushed the cryptocurrency down by more than 30% through November.
That said, a short-term Bullish reversal would be confirmed only above the recent high of $4,410.
Now, BTC is changing hands at $3,940.40 off a bit on the day.
BTC’s break below that Key support confirmed an end of the oversold bounce. Further, the 5- and 10-Day EMAs continue to trend South in favor of The Bears.
The Key indicators are pointing to the Southside. That will change if prices establish a higher-lows and higher-highs pattern with a convincing move above $4,410.
The breakout, if confirmed, would open the path to $4,410.
- The odds of an immediate drop toward $3,500 have dropped somewhat with BTC’s quick recovery from the 1-week low of $3,730.
- A falling channel breakout on the hourly chart would open a move toward $4,410. A UTC close above that mark would signal a continuation of the recovery rally from the 14-month low of $3,474 marked on 25 November.
- A fall below $3,730 would put the focus back on the Bearish technical setup and could bring on a re-test of $3,474.