Bitcoin (BTC) – Bearish bearing is taking a breatherPosted on Sunday, May 15 2022 at 9:06 pm GMT+0000
Bitcoin (BTC) fell like a stone after cracking the bottom line of the almost five-month-old channel, stretching the broad negative trajectory to levels unseen since late December 2020.
However, following the sharp sell-off, the crypto-king painted a bullish Dragonfly Doji candle on the daily chart last Thursday and stabilized somehow over the weekend. Such a pattern usually foresees a reversal in price direction, though additional green candlesticks will be needed to confirm that.
Moreover, the momentum indicators suggest that the recent faint bullish attempt could still see further continuation. The RSI jumped out of the oversold area, the momentum indicator rotated higher after bottoming around January lows, while the TSI has eased its negative momentum, all endorsing improvement in market sentiment.
Meanwhile, the path north is hiding several obstacles that could complicate recovery efforts. The nearest and most significant is the January low of 33,000 followed by the February low of 34,300 and the adjacent 20-day simple moving average. While within a breathing distance, another tough fight will take place around the region formed by the March 7th inside swing low of 37,100 and the 50-day simple moving average seen around 39,600, encompassing the lower line of the broken channel. Further higher, attention will turn to the April 21st inside high of 43,000.
In the big picture, however, the bearish trend is still sturdy and sponsored by the negative bearing of the simple moving averages. A drop below 25,000 will pave the way towards the 20,000 psychological number.
In summary, a minor recovery will be more than normal following last month’s sharp downfall, and momentum indicators cheer for such a scenario. The path higher, however, could be a rocky one as several obstacles may quickly block the way.