Closing on $4k: Bitcoin Price Recovers From One-Week Lows

A quick recovery from one-week lows seen today may have helped bitcoin avert a bigger sell-off, but the bulls are not out of the woods yet.

The leading cryptocurrency by market capitalization established a bearish lower-high pattern at $4,400 last week and closed well below $4,000 yesterday, confirming an end of the corrective bounce.

As a result, BTC was on the defensive earlier today, with prices hitting a one-week low of $3,730 on Bitstamp, before quickly rising back to near $4,000.

The sudden recovery from one-week lows likely indicates that sellers are reluctant to step in at current levels and may be exhausted, having pushed the cryptocurrency down by more than 30 percent through November.

As seen above, BTC struggled to close above the 10-day exponential moving average for four days straight before falling below $3,861 yesterday.

BTC's break below that key support confirmed an end of the oversold bounce.

Over on the hourly chart, BTC's recovery from seven-day lows has established a bullish divergence of the relative strength index.

As a result, BTC may witness a falling channel breakout in the next few hours.

View The odds of an immediate drop toward $3,500 have dropped somewhat with BTC's quick recovery from the one-week low of $3,730.

Bitcoin image via Shutterstock; price charts by Trading View.