Bitcoin Eyes Minor Price Bounce But Bear Trend Intact

View Bitcoin's minor recovery rally from six-week lows could be extended further to levels above $3,500 as back-to-back long-tailed daily candles are indicating a lack of conviction among sellers, despite Monday's high-volume range breakdown.

Rejection at the 10-day MA would reinforce the primary bearish trend and could yield a quick drop to the December low of $3,122.

On the way lower, BTC may find support at the 200-week moving average of $3,298.

Bitcoin has recovered slightly from six-week lows seen yesterday and could see a short-term corrective bounce to $3,500.

The leading cryptocurrency is currently trading at $3,416 on Bitstamp, having hit a low of $3,322 on Tuesday - a level last seen on Dec. 17.

Monday's high-volume range breakdown and the drop to multi-week lows had pushed the relative strength indices on the hourly and 4-hour charts below 30.00.

With the minor rally those RSIs have moved back to undersold territory and are now in line with the bearish view put forward by a convincing break below $3,500 seen on Monday.

The drop to December lows near $3,100 may not happen immediately as stronger signs of temporary bearish exhaustion have emerged on the longer duration charts.

The doors look to have been opened for a drop to December lows near $3,100.

A long-tailed candle occurs when there is a big gap between the daily low and UTC close, that is, when sellers fail to secure a close near the lowest point of the day.