- Bitcoin soars above $8,400 in an unexpected recovery mission.
- As the RSI retreats from the overbought, Bitcoin targets $8,200 on the downside.
The battered bulls majestically rose from the ‘crypts’ of hibernation they went through the entire weekend as well as on Monday. The retracement put to risk the support at $8,000, inconsiderate of the hard work put in the recovery from levels marginally above $7,600 to $8,200 on Friday last week.
As predicted in the previous analysis, the consolidation above $8,000 was key for the recovery currently testing $8,500. The gains experienced last week saw Bitcoin reclaim the position above $8,200 and pulled the engulfing candle above $8,400.
In spite of the recovery, $8,500 stubborn resistance has been tested once again but left unbroken. Bitcoin is doddering at $8,404 amid a developing bearish momentum. The failure to break the $8,500 hurdle, appears to be giving the bears a chance to retaliate.
BTC/USD 4-hour chart
For now, the biggest task in the bullish camp is to stop losses beneath the key $8,400 support. Technically, the momentum is turning bearish, especially with the RSI retreating from levels close to 80. In case the falling RSI continues towards the average, Bitcoin could easily plunge back into the $7,000 range.
However, in terms of support areas, Bitcoin will be cushioned against dips at $8,200. The key level at $8,000 will come in handy as a last resort to avert the risk of returning into the $7,000 range. It is unclear if Bitcoin can sustain gains above $8,400 by the end of the day on Wednesday. A reversal towards $8,200 support could allow for more bullish entries, pushing the price above $8,500.
Bitcoin Key Levels
BitMEX index price: $8,380
24-hour volume: $2.1 billion
Open Interest: $808 million
Percentage change: 3.65%
RSI: Retreat from 80 signals a possible reversal, targeting $8,200.