Bitcoin: Dead Cat Bounce or Recovery?
Bitcoin persistently sold off further into the weekend only, but it found support at the lower bound of the KRI around $8.7K after testing relative lows in the $8.5K exactly. A green triangle in on the KRI indicator seems to support this. Currently, BTC is in the upper $9K handle, in a vacuum zone to $10.2K.
The Kovach Momentum Indicators do appear to be picking up from their previous slumber and gradually turning bullish. It is good news that we have rejected that the lower bound of the KRI on day charts. We will soon face the central moving average of this indicator which will provide resistance. If we can test the upper bound again, it is likely we have broken the bear phase.
Our Elliott Wave analysis supports the fact that we are still in a major corrective phase, possibly wave 2 of the impulse. To confirm entry into wave 3, we must break relative highs at $11.8K. Currently, we are still in the $9K's, and if momentum turns sour again, we can go as low as $6.8K for the bull impulse phase to still be valid.
BTC has made progress in attempting to reach its previous range in the $10K and $11K handle. The bottom appeared to be the psychological $8.5K level and this was rejected pretty swiftly. From here, it swiftly regained footing in the $9K handle. Currently, it sits in the midst of a vacuum zone between $9.7K and $10.2K. We can expect BTC to test $10.2K though a correction can be expected first. After $10.2K, we will find resistance at $10.2K, $10.4K, $10.6K, $10.8K, and $11K, where BTC held a range period before all this. From below, we have support at $9.7K, $9.3K, $8.9K, $8.6K and finally $8.5K. It is time to worry if we break $8.5K.
CONCLUSION - Although Bitcoin has demonstrated persistent bearishness, it has recovered for the moment. We will see if this momentum lasts, or if it is transient. There does appear to be strong buying volume which is promising. Currently we are in a vacuum zone with support from below immediately at $9.7K. After that, we have support at we have support at $9.3K, $8.9K, $8.6K and finally $8.5K. It is time to worry if we break $8.5K. After $10.2K, we will find resistance at $10.2K, $10.4K, $10.6K, $10.8K, and $11K, where BTC held a range period before all this. Over the next few days, we will see if this recent bear rout was a corrective phase, or if the tide has turned bearish for BTC.
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