- Bitcoin’s repeated defense of the 100-day moving average signals seller exhaustion, but a break above $10,445 – the high of Thursday’s hammer candle – is needed to confirm a bull revival.
- A high-volume move above $10,445 would open the doors to re-test of $11,120.
- BTC may have a tough time scaling $10,445, as the daily chart indicators are biased bearish.
- The risk of a drop to $9,049 (July 17 low) remains as long as prices are held below that level.
Bitcoin (BTC) has bounced from key price support, but the outlook remains bearish as long as prices hold below Thursday’s high of $10,445.
The leading cryptocurrency by the market value found takers near the widely followed 100-day moving average (MA) at $9,700 earlier today, but at time of writing had regained ground to around $10,060, according to Bitstamp data.
Sellers had managed to breach the 100-day MA in the early European trading hours on Thursday, but the breakdown was short-lived and BTC ended the day with 2.78 percent gains at $10,301.
In technical terms, the cryptocurrency created a long-tailed hammer candle on Thursday, implying seller exhaustion near the 100-day MA.
The recovery from the 100-day MA support seen today has further confirmed the weakening of bearish momentum.
A short-term bullish reversal, however, would be confirmed only if buyers make their presence felt today, pushing prices above Thursday’s high of $10,445. That would validate the seller exhaustion signaled by Thursday’s long-tailed hammer candle.
Long-tailed daily candles have consistently reversed pullbacks in the recent past, as seen in the chart below. So, there is a historical case to be made for a price rise above $10,445 today.