Bitcoin Returns Above $8K, But Sell-Off Risk Remains

Bitcoin’s (BTC) corrective rally could soon see prices climb back to $9,000, however, the longer-term outlook stills remain bearish, according to the technical charts.

Bitcoin fell to a 5.5-week low of $7,335 on the BPI yesterday, a drop linked to reports that Twitter is planning to ban cryptocurrency ads. In recent weeks, both Facebook and Google have announced similar bans on advertising content related to crypto exchanges and token sales.

However, the drop to a multi-week low was short-lived and the cryptocurrency quickly regained poise – possibly due to a bullish relative strength index (RSI) divergence – clocking a high of $8,435 earlier today.

Further, the Financial Stability Board (FSB), which coordinates financial regulation for the G20 economies, yesterday rejected calls for stricter regulation of cryptocurrencies, according to a Reuters report – news that may have played a part in boosting BTC prices.

Looking ahead to later in the day, BTC could well extend the corrective rally towards the $9,000 mark.

As of writing, the cryptocurrency is trading at $8,154, as per CoinDesk’s Bitcoin Price Index(BPI). The global average price, as calculated by CoinMarketCap, is seen at $8,219 – up 6.5 percent on a 24-hour basis.

4-hour chart

A high volume upside break of the falling wedge (bullish reversal pattern) would add credence to the bullish price-RSI divergence and open the doors for a rally to $9,000 (prices as per Bitfinex).

On the other hand, a repeated failure to hold above the resistance at $8,342 (marked by a circle) would shift attention back to $7,800…

Read Full: Bitcoin Returns Above $8K, But Sell-Off Risk Remains