Bitcoin remains in a bullish territory for now and is looking at further gains, though a pullback is possible if support at $7,900 is breached, according to technical studies.
The cryptocurrency's first attempt to scale the long-term descending trendline (drawn from the Dec. 17 high and Jan. 6 high) failed on Monday and prices fell below $8,000 as expected at 12:00 UTC.
It's worth noting that the Bollinger bands (seen on the chart below) show the volatility dropped after BTC dipped below the psychological mark, likely signaling indecision among the bears. As a result, it is not surprising the dip below $8,000 was short-lived.
As of writing, BTC is changing hands at $8,145 on Bitfinex, largely unchanged on a 24-hour basis, but could soon report further gains as the hourly Bollinger bands indicate scope for a retest of $8,400-$8,500.
The Bollinger bands (+2 and -2 standard deviations from the 20-hour moving average) narrowed after the dip below $8,000, indicating the low volatility period - popularly known as a Bollinger band squeeze.
The 19-hour squeeze ended with a bullish breakout. Additionally, the hourly relative strength index (RSI) is above 50.00 and trending north, also indicating a bullish setup. So, BTC could have another attempt at breaching at the trendline resistance seen today at $8,420.
However, a failure to capitalize on the bullish Bollinger breakout could yield a drop below $7,900 (previous day's low). In such a case, BTC will likely test 4-hour 200 MA lined up at $7,690.
That said, the outlook as per the daily chart still remains bullish.
Only a daily close below $7,510 (double-bottom neckline/former resistance turned support) would abort the bullish view.
Meanwhile, a dip to $7,690 will likely find bids as the short-term momentum studies are biased bullish. The 5-day MA and the 10-day MA continue to slope upwards (bullish).
Bitcoin on rail via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Richemont Director Jin Keyu Joins Blockchain Startup as Adviser
Richemont, the Swiss luxury goods giant that owns Cartier, will potentially utilize blockchain in a move aimed to bring transparency to its supply chain.
Jin Keyu, a renowned economist and an assoc
Thailand Is Planning a 'Bond Coin' for Faster Securities Settlement
A self-regulatory organization in Thailand is planning to create a custom token aimed to speed up corporate bond settlement in the country.
The Thailand Bond Market Association (TBMA) said it has r
G20 Watchdog Releases Framework for 'Vigilant' Crypto Monitoring
The Financial Stability Board (FSB), an organization focused on analyzing and making recommendations to the G20 on global financial systems, has presented a framework for monitoring cryptocurrency ass
Report: World's Biggest Asset Manager BlackRock Exploring Bitcoin
Global investment management company BlackRock is reportedly mulling a move into bitcoin.
According to a Financial News London report on Monday, the New York-based asset manager has now set up a wo
A Crypto Exchange Is Buying Back $24 Million-Worth of Its Own Tokens
FCoin, a new cryptocurrency exchange that saw spiking trading volume recently due to its controversial revenue model, has revealed a plan to buy back millions of its own tokens to provide capital for
Hong Kong's Blockchain Trade Finance Platform to Go Live By September
The Hong Kong Monetary Authority (HKMA), the autonomous Chinese territory's de facto central bank, is poised to launch a live blockchain trade finance platform within two months.
"The Trade Finance
Peter Thiel, Bitmain Co-Founder Invest in EOS Developer Block.one
EOS protocol maker Block.one has received new backing from a number of big-name investors, including PayPal co-founder Peter Thiel.
In a fresh round of funding – the amount of which was not disclos
Court Approves Alleged Bitcoin Money Launder's Extradition to France
A Russian national accused of laundering billions of dollars on the now-defunct crypto exchange BTC-e could soon be extradited to France following a court decision.
Since his arrest last summer, Al