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Bitcoin has gained ground over recent trading sessions, but the technical charts suggest we may not have confirmed a bottom for the price just yet.
Bitcoin has been gaining ground at a rapid rate in the past couple of weeks, with XBT/USD rising 60% over the past nine days. To many, this has brought the cryptocurrency back into the limelight.
Valuations across the cryptocurrency space are heavily discounted compared with the highs seen last year, and many will see the recent ascent in prices as a buying signal. However, the charts suggest that we may not be out the woods quite yet, with a break through key resistance required to negate the two-month downtrend.
Looking at the daily chart, there is a clear downtrend in place. However, with the recent rebound pushing bitcoin through the middle Bollinger band, we are seeing a challenge that has not been seen in over a month. It is also notable that we are seeing the stochastic moving towards a bullish divergence, with a push through 65 providing a higher high, to point towards the possibility of a break higher in the price.
On the four-hour chart, there is a clear downtrend in play, and only a break above $11,773 would negate this. Until that happens, there is a chance we are setting another retracement, with the 76.4% retracement ($10,393) yet to be broken. The price has clearly been pushing onwards, with a rally through near-term trendline resistance highlighting the chance that near-term weakness will be temporary. A break below $8367 would be required to bring a more bearish outlook back into play. However, while we could see further short-term upside, this would only translate into a bullish wider view with a break above $11,773.
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