- Bitcoin formed double bottom pattern hints further breakout subject on improving the technical picture.
- If Bitcoin fails to hold above the 23.6% Fib level, correction under $8,000 will most likely occur.
Bitcoin made a majestic recovery on Monday through to the early hours of Tuesday. The gains following the plunge under $8,000 have been generally linked to the technical picture. BTC/USD was acutely oversold at lows marginally above $7,000. The oversold conditions couple with the improving technical picture thrust Bitcoin to highs thin a whisker above $8,500.
The move initially stepping above the 23.6% Fibonacci retracement level taken between the last swing high of $10,384 to a swing low of $7,715 and later overwhelming the congestion of sellers at $8,400.
BTC/USD 4-hour chart
The moving average convergence divergence (MACD) is striving to jump across the line into the positive territory. The wide divergence of the MACD shows that the buyers have more influence despite the correction from the intraday to the current market value of $8,356.
The decreasing volume, however, means that if Bitcoin fails to return above $8,500 as well as break above the next hurdle at $8,600, risks of retracement under $8,000 are very high. The target on the downside is $7,600. In this zone, Bitcoin is likely to encounter more buy entries adding to the demand. The bullish pressure in this zone will propel BTC above $9,000.
The double-bottom formation on the four-hour chart suggests that more gains are likely to occur as long as the technical picture keeps improving. Re-emergence above $8,500 and $8,600 hurdles respectively will mark the continuation of the bullish momentum commenced yesterday.
Bitcoin Key Technical Levels
Last price $8.340
Relative change: $+35
Percentile change: 0.42% (on the day)
Trend: Bearish (short-term).