Sign Emerges That Falling Bitcoin Price Just Might Have a Floor
Bitcoin (BTC) seems to have built a base around a key moving average in the last four months, although, so far, it has not been able to produce a definitive bullish breakout.
Throughout 2018, the leading cryptocurrency has set lower price highs, indicating the path of least resistance is to the downside.
Despite the bearish setup, the 21-month exponential moving average (EMA) has served as a strong floor since June. More importantly, the failure to beat the EMA support for four straight months indicates that the sell-off from the record high of $20,000 reached in December has likely run its course.
So, it seems safe to say that the stage has been set for the cryptocurrency to jump above the recent lower price high of $7,429 hit a month ago and confirm a bearish-to-bullish trend change.
Even so, the bulls have been reluctant to push prices north of $6,800 in the last two weeks. Still, since BTC tends to perform well in the last three months of the calendar year, that may be about to change.
At press time, BTC is trading largely unchanged on the day at $6,585 on Bitfinex.
As seen on the monthly chart, BTC produced a minor rally to $8,500 in July, after finding support at the 21-month EMA in June.
Further, the sellers failed to penetrate the EMA support in August and September, establishing it as a key level to watch out for in the near-term.
Over on the daily chart, the 5-day and 10-day EMAs are flatlined, indicating that the bitcoin market is currently lacking a clear directional bias.
The outlook as per the daily chart would turn bullish if and when the cryptocurrency finds acceptance above the trendline connecting the July 25 high and Sept. 5 high. As of writing, the trendline resistance is located at $6,802.
The bear failure, as seen in the monthly chart, does indicate scope for a break above the trendline hurdle in the near-term.
- BTC seems to have bottomed out around the 21-month EMA, currently located at $6,150.
- A UTC close above the falling trendline seen in the daily chart would open up upside toward $7,429 (September high). A high volume move above that level would add credence to BTC’s repeated defense of the 21-month EMA and confirm a bearish-to-bullish trend change.
- On the downside, a convincing move below the 21-month EMA will likely embolden the bears.