The narrowest trading range in about six months has bitcoin technical analysts scouring price charts to help figure out whether the biggest cryptocurrency is poised to build upon its April rally.
“The market is not sending off strong signals as we speak as to the direction of the next major move,” Evercore ISI’s Rich Ross said. And though the bigger trend is higher, he said, “bitcoin is likely to remain violently sideways until a new trend emerges.”
Bitcoin is lingering around $US9000 after surging 35 per cent in April, the best monthly performance since it rocketed to almost $US20,000 in December, and subsequently lost more than half its value while crashing back to earth.
“Bitcoin is positive or bullish, having reversed its December to April downtrend,” said Rob Sluymer, a technical strategist at Fundstrat Global Advisors LLC. “It’s now in what we view as a healthy pause under its 200-day.”
Sluymer said this is indication of the digital currency now having reached a broader, longer-term recovery, with the 70 per cent decline bear market being over.
“Bitcoin is now in the early stages of a recovery mode,” he said.
Given the digital currency’s volatility, Ross said round numbers like $US9000 are of less significance from a technical standpoint. Instead, he is keeping an eye on the 50-day moving average of about $US8600 as key support and the 150-day at $US9700, which he said have defined the range over the past eight sessions.
“A breakout or breakdown below and above those levels would hold some short-term significance technically, but this is likely to be a dogfight for some time,” Ross said.