Bitcoin’s Price Sets Sights on $8K After Sunday Sell-off
Bitcoin’s price continues to hold ground amid a market sell-off, with growing momentum building to take out its next target of $8,000.
The world’s largest cryptocurrency by market capitalization fell 3 percent over the weekend, hitting $7,333, according to Bitfinex data, after a quick sell-off from investors dragged down market prices.
As it turns out, bitcoin is slowly regaining and consolidating its losses to stand at $7,637.38 as of press time. The crypto shows strong signs of a steady recovery to retest the upper resistances found at $7,575 and $7,694 (the market’s previous close and the previous high).
The previous exponential moving average (EMA) bull cross, last seen yesterday, foretold a bullish break above the previous resistance at $7,370, which saw prices rise three percent, paving the way for the sell-off that occurred just hours ago.
However, if the current momentum continues, expect the 55-period-EMA (red) to cross the short-term averages (8,21) once more, creating another potential bullish setup as it edges closer toward its next psychological target of $8,000.
Watch for consistent hourly closings above the next bull target of $7,575 (the top of the previous high) to confirm a bullish continuation.
Another factor adding to bullish sentiment is the amount of increasingly bullish volume, lending credence to the bullish bias which has already surpassed the previous hourly total of 972 million to stand at 1.379 million, according to Bitfinex data.
Conversely, if the bulls are unable to maintain the same amount of volume in the coming hours, expect prices to stall as buying and price action come to a grinding halt once more.
The daily trend continues to squeeze prices inside a tightening range between $7,374 and $7,575, potentially igniting the fire needed to propel investors toward the elusive target of $8,000.
Bearish technicals in both the Relative Strength Index and MACD could stall prices in the short-term, which may last briefly as the hunt continues.
- Another sell-off would be likely to reset both the MACD and RSI readings, only this time the bulls would like to close above $7,575 (resistance turned support) after a run-up to $8,000.
- Price hurtling toward a breakout from the tightening range after a recovery from the recent sell-off.
- Bulls continue to show up and countertrade the sell-offs, adding to the possibility of “FOMO” (Fear of missing out) amongst traders.
- The daily RSI is approaching overbought territory after holding above 63.00 for quite some time and could act as a major deterrent for new money coming into the market in the short-term.
- The bullish daily MACD also shows signs of waning price action, with the histogram ticking down and the signal line beginning to curve lower.