- Bitcoin has again bounced up from the 100-week moving average – a level which has acted as strong support in the previous two weeks and during the early stages of the previous bull market.
- The defense of the 100-week MA coupled with the oversold conditions on the daily chart suggests scope for a recovery rally to $8,500.
- The case for a bounce would weaken if prices find acceptance below the support level, currently at $7,753. That could pave the way for a slide to $7,200.
Bitcoin (BTC) has again defended historically strong price support near $7,700, keeping the hopes of a corrective rally alive.
The top cryptocurrency faced selling pressure and fell below $8,000 over the weekend, contradicting the possibility of a recovery rally above $8,500 suggested by a key technical indicator on Friday.
Even so, all is not lost for the bulls, as the widely-tracked 100-week moving average (MA) support has held ground. BTC almost tested the key technical line at $7,753 in the Asian trading hours before rising back above $8,000 around 12:20 UTC.
Notably, the long-term MA has been acting as strong support since the last week of September. Now, the bears’ repeated failure to penetrate key support may draw bids from short-term traders, yielding a corrective rally.
BTC’s defense of the 100-day MA may also excite long-term investors, as the MA had served as a base during nascent stages of the previous bull market, as seen in the chart below.