Key Trading Indicator Suggests Bitcoin Bulls are Steadily Accumulating

Bitcoin closed the week with a selloff, pushing price below the $8k handle and printing a close down 2.5% for the week as a whole.

Despite an ominous close to the bottom of the trading range, Bitcoin has rebounded higher this morning alongside other cryptocurrencies, with notable gainers XRP and Link breaking 10% gains for the day.

With that in mind and with Bitcoin sat at a crossroads, we will take a closer look at the key timeframes to try and determine if Bitcoin is nearing a bottom.

For Bitcoin to return to a convincingly bullish outlook, a break across the descending diagonal resistance, prior weekly support and the 20-WMA will all be necessary; meaning that as it stands, $9,500 would be the main task for the bulls on a macro level.

Today's recovery has served to close the gap in the weekly price at the CME Bitcoin futures which is what some traders insist serves as a magnet to price.

Daily Bitcoin price chartA closer look at the daily chart reveals that Bitcoin did briefly trade lower in the early morning, but quickly recovered to retake the $8k handle and the middle of the trading range.

The 4-hour Bitcoin chart demonstrates that the bulls made quick work of the diagonal resistance and the previous resistance in the middle of the range.

The current price action Bitcoin has been displaying is similar to that of the transition from phase C to phase D of the Wyckoff accumulation chart.

Bearish scenarioWhile Bitcoin and other cryptocurrencies have made a good start to the week, it is off the back of a lower low on the weekly close and in the shadow of a major support break at the $10,000 handle.

Looking ForwardOverall, the Bitcoin bulls have made a good start to the week by attempting to recover losses from late last week.