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A Textbook Technical Move In Bitcoin After Last Week's Haircut

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A Textbook Technical Move In Bitcoin After Last Week's Haircut
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Bitcoin is trading higher by 14.37 percent at $16,113 as of 1 p.m. ET Tuesday, according to the latest quote from coinmarketcap.com.

After an extremely volatile week, the currency is doing what any trading instrument does after a large move. In other words, it retraces a portion of the move, in order to determine if the new price action has changed the trend, or whether or not it was a "breather" in the current trend.

Although Fibonacci retracements focus on 0.386- or 0.618-percent retracements of a move, many technicians favor the 50-percent retracement, which comes right in the middle of the two.

Once again, according to coinmarketcap.com, Bitcoin peaked Dec. 17 at $20,089 and its ensuing decline bottomed at $11,833 Dec. 22. Therefore, a 50-percent retracement of that decline comes in at the $16,000 area.

Contributing to the rebound is the fact that bitcoin has made eight lower highs since its Dec. 17 peak — an unsustainable trend — culminating with a double top at the $14,600 area from Sunday and Monday's session. From a technical view, the way many market participants are trading it, the combination of the two technical factors ignited the rebound.

For now, bitcoin bulls are cheering that it has surpassed the 50-percent level on an intraday basis, so far reaching the mid-$16,000 handle. Those still cautious on the rebound will be waiting for a series of closes above that level in order to determine if a retest of the recent high and beyond is on the horizon.

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Posted-In: BitcoinCryptocurrency Technicals Intraday Update Movers Trading Ideas Best of Benzinga

 

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