Bitcoin’s recovery may be just a pipe dream

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btc recovery
  • BTC/USD recovery momentum has faded away on approach to strong resistance.
  • A move below $7,000 will negate the recovery attempt.

Bitcoin (BTC) topped at $7,452 late on Wednesday, before new sellers joined the game and pushed the coin back towards $7,000. At the time of writing, BTC/USD is changing hands at $7,092, down nearly 3% on a day-to-day basis.  Will the coin move below $7,000 again, or launch another assault at $7,300 after a temporary pause? Read on to get the answers. 

BTC/USD: technical picture

From the long-term post of view, BTC/USD is moving along the descending support line, which is also a lower border of a descending wedge. The price validated this support line four times since the end of December, which means it is likely to serve as a decelerator for the bearish trend. 

However, the recovery attempts are doomed as long as the price stays inside the wedge with its upper border currently at $8,950. We will need to see a sustainable move above this handle for the upside to gain traction and take the price towards the next barrier at $9,700, created by 38.2% Fibo retracement for the upside move from December 2018 low to the highest level of 2019. Notably, the price is hovering around 61.8% Fibo retracement for the above-said movement, unable to engineer a decisive breakthrough. 

The weekly RSI (the Relative Strength Index) is flat and still far from oversold.

BTC/USD daily chart

BTC/USD: Fundamental developments

The bitcoin market is often influenced by so-called whale transactions, which means sometimes it can be somewhat unpredictable. However, this time around, the community noticed a sharp growth of long orders on Bitfinex. Those longs have not been liquidated even amid the sharp sell-off that took BTC below $6,500 on Wednesday. 

One of the most probable explanations implies the whales’ activity. Large investors may have been consolidating positions before a massive pump. If this is the case, then BTC/USD should resume the growth and break above the local barrier and proceed towards the wedge resistance. 

At the time of writing, there are 45,861 long orders registered on Butfinex, according to the TradingView data.
Source: fxstreet

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