After a tumultuous week for bitcoin bulls, news of rapid gains in the last 24 hours offer some temporary relief. But while it looks like bearish testing of bitcoin is showing some signs of exhaustion, risks exist of a further bitcoin pull-back. Analysts are subsequently urging caution in the world’s largest crypto market.
A prolonged rally in recent weeks took BTC back towards $13,880. However, bitcoin then found itself on the back foot, defending a slide that fell as far as $9,614.
STrading over the last 24 hours has confirmed strong support at this level. BTC rebounded by over $2,000 to regain levels above $11,300. At the time of writing, the bitcoin price was trading at $11,690.
Bitcoin bulls will delight in news of the turnaround. Nevertheless, there is still work to do before the next bull rally can be confirmed.
CoinDesk analyst Omkar Godbole said that traders should be looking for a move beyond $12,448 to indicate a surge in bitcoin interest.
“Bitcoin has risen nearly $2,000 in the last 24 hours, establishing strong support at $9,600. The outlook, however, would only turn bullish once the bearish lower-highs pattern is invalidated with a move above $12,448.”
Gains over the last 24 hours represent a climb of some 11% on the day. However, Godbole warned that if prices fail to hold $10,830 over the next 24 hours trading period, it would indicate the start of a bitcoin pull-back and that market sentiment had headed south.
“A breakout, if confirmed, could be followed by a rise to or above the recent high of $13,880. Bitcoin could fall back to $9,600 if prices fail to hold above $10,830 in the next 24 hours, validating the bearish crossover of the 5- and 10-day moving averages.”
Technical analysis indicators confirm this view. The 14-week relative strength index suggests bitcoin remains overbought.
The best advice for bitcoin bulls for the time being appears to be to hold out for confirmation above $12,448. With bitcoin trading volatile in recent days, the risk of a confirmed bearish crossover may well mean further choppy trading to come this week.