Bitcoin loses recovery momentum ahead of $7400, erases 2.7% for the week

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  • Bitcoin continues to trade in tight range above $7000. 
  • Despite modest rebound, BTC/USD looks to close week in red. 

Bitcoin’s (BTC/USD) recovery attempt on Saturday lost its strength ahead of $7400 amid a lack of volume ahead of the new year break. After closing the day 0.7% higher on Saturday, the BTC/USD pair has gone into a consolidation phase on Sunday and was last seen moving sideways near $7300, where it closed the previous day. Despite the latest rebound, the pair is still down 2.7% on a weekly basis.

Technical outlook

The Relative Strength Index (RSI) on the daily chart is staying flat near the 50 mark, suggesting that the pair could extend its sideways grind in the short-term. On the other hand, the fact that the pair was able to close the third day in a row above the 20-day moving average (MA) could be seen as a positive development but the absence of significant fundamental drivers and the choppy market activity are likely to keep the pair’s gains in check.

$7400 (Fibonacci 23.6% retracement of the October 26-December 18) aligns as the initial hurdle ahead of $7600 (static resistance) and $8000 (Fibonacci 38.2% retracement October 26-December 18 drop/psychological level). Supports could be seen at $7200 (20-day MA), $7000 (psychological level) and $6430 (December 18 low).

BTC/USD daily chart

 

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