Bitcoin price update: BTC reclaims $7,000, recovery stalled

Bitcoin (BTC) has recovered from a scary flash crash that took it all the way down from $7,800 to as low as $6,512. The first digital coin lost about 16% of its value in a matter of hour with no particular reason except for speculative positioning and profit-taking ahead of the weekend. While Bitcoin managed to claw back some ground and return to the area above $7,000, it is still more than 7% lower from the start of the day and 9% down on a day-on-day basis.

Looking technically, BTC/USD reclaimed $7,200 barrier (SMA200 1-hour, SMA50 4-hour)), which now serves as local support for the coin. Once it is cleared, the downside is likely to gain traction as the coin will negate all weekly gains. The next focus is on psychological $7,000. Another move below this handle will speed up the sell-off towards $6,800 and spoil the short-term technical picture. The ultimate support is created by a confluence of strong technical indicators on approach to  $6,500. They include SMA100 weekly and SMA200 4-hour).

On the upside, we will need to see a sustainable move above $7,500 barrier (Pivot Point 1-n=month resistance 3) to negate immediate downside pressure. Once it is cleared, the upside is likely to gain traction with the next focus on $7,800 (SMA5 h-hour and DMA5), followed by a critical $8,000.

The Relative Strength Index on intraday charts has moved outside an oversold territory; there are no signs of the reversal yet. It means that the prices are likely to consolidate at current levels for the time being.

BTC/USD, 4-hour chart