Bitcoin (BTC) has been struggling to follow through on a sort-of bounce yesterday, off of the $8,000 level. Low volume and very clear rejections at key levels do not bode very well for an end to the downtrend, as both short and long term charts turn bearish.
Starting with the 4-hour, the first thing we notice is the very clear series of rejections right at the 8 EMA. Bitcoin has been unable to even penetrate, much less close above, this first common moving average used by many analysts, despite remaining in oversold territory.
The candles on this bounce off of $8k (and just above the 0.786 Fibonacci level) have been very “wick-y”, however, speaking to a contentious market. We may take away from this that, at least, plenty of bulls have been fighting to form some momentum here, to no avail. Volume overall has been very low in the past day, and it is a good possibility that Bitcoin will not manage to even clear the 8 EMA.
If we concentrate just on the 4-hour histogram, we see that what had been a promising and smooth arch up has quickly flattened, and at time of writing seems to be starting to arch down slightly – although the candle is not quite closed yet, and this could still change in the coming hours.
Looking on the daily chart, though, we get a picture of less-bad, at least. There was a definite reaction at the 0.786 level on the Coinbase chart. Volume has been generally low during the November downtrend, and remains so on this dump – suggesting perhaps a lack of buy support than a torrent of sell pressure.
The very choppy histogram may be starting to turn around here, as it is hard to believe we will see more sawtoothing down with such low sell volume. The RSI has dipped well below the halfway point of the range, and the EMAs have been left far behind – in itself suggesting that price may have deviated too far from them already.
In short, both sides of Bitcoin trading look fairly weak. The bulls have shown up to guard $8,000, but not to do anything else. Sell volume does seem to be ebbing, though. It will be a wait-and-see day in the Bitcoin market.
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