RATE Group | Bitcoin Back Above $8,500 But Does Rally Have Legs?
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Bitcoin Back Above $8,500 But Does Rally Have Legs?

21 May Bitcoin Back Above $8,500 But Does Rally Have Legs?

Posted at 09:36h in Bitcoin News by

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Bitcoin’s (BTC) has bounced back above $8,500, but the rally is not backed by decent trading volumes, the technical charts indicate.

The cryptocurrency closed below key technical levels on Thursday, signaling a bearish breakdown, but the ensuing sell-off unexpectedly ran out of steam at $7,925 on Friday. Then, over the weekend, bitcoin gained more than $500, rising back above resistance at the 50-day moving average.

As of writing, BTC is changing hands at $8,530, having clocked a six-day high of $8,644 earlier today.

While last week’s bearish trend seems to have run out of steam (as seen in the charts below), the weekend’s low-volume rally risks trapping the bulls on the wrong side of the market.

4-hour chart

The inverse head-and-shoulders breakout indicates short-term bullish trend reversal – i.e. the pullback from the high of $9,990 has ended and the breakout has opened the doors to $9,000 (target as per the measured height method.

Daily chart

The daily chart shows…

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