Bitcoin recovers today reaching above $4,000 again

CoinDesk analysis

The last analysis Omkar Godbole made on CoinDesk was on Friday December 21 at 10:47 UTC. He notes that Bitcoin (BTC) is looking increasingly bullish after it made a strong move above $4,000. Bitcoin first showed signs of a bullish reversal on December 17 when it created an “outside reversal” candle on the 3-day chart. However, this needed confirmation by a positive follow-through. Godbole points out that along with BTC’s rally of $600 it closed on December 21 above $4,000 adding to the bullish reversal on the 3-day chart. BTC could test the next major resistance level of $4,400 in the near term. When Godbole posted his analysis, Bitcoin was trading at $4,000 on Bitstamp virtually unchanged on a 24-hour basis.

Chart analysis

The 3-day chart shows confirmation of the bearish-to-bullish trend as the last candle has ended well above $3,590 the high of Monday’s outside reversal candle. Adding even more weight to this trend BTC has moved above the 10-candle exponential moving average (EMA) December 20th.

The relative strength index (RSI) has moved into undersold territory confirming the bullish divergence created back on December 15.

The daily chart shows the creation of a “gravestone doji” candle last Wednesday often seen as an early sign of a bearish reversal. The recovery rally from the 15-month lows near the $3,100 level would probably have stalled if BTC closed below Wednesday’s low of $3,642. However, BTC closed well above $3,924, the high of the gravestone doji candle, strengthening the bullish view suggested by BTC’s close on Tuesday above $3,633.

Also, the 5 and 10-day EMAs are trending upward and the 14-day RSI is well above the 50 level.

Godbole’s outlook

Based on his technical analysis Godbole’s view is: “A bullish reversal is confirmed on the three-day chart. BTC could extend the ongoing rally to $4,400 in the next few days. A daily close below $3,633 would abort the bullish setup, although the probability of a bearish close happening in the near term is low.”

Present situation

24 hours ago BTC was trading at $3,832 according to CoinDesk data. It has reached a high of $4,018 since then an posted a low of $3,791. At 21:20 Central Standard Time BTC was trading at $3,984 a rise of over 4 percent over the 24-hour stretch or more than $150 dollars. There is no sign of BTC so far testing the $4,400 level but perhaps it will take some consolidation before it makes another run at the $4,400 resistance level. There is no sign of a bearish close. Perhaps tomorrow BTC will try again to continue the recovery more strongly. The present price of Bitcoin can be found here.

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