Ah, how cruel are the hands of fate! It was quite a slog up to $9,990 and with the 10K peak just a few steps further, BTC slipped and tumbled all the way back under $9,000. So the question remains… are traders in for a day or two of range bound trading or is this pause in momentum simply a period of consolidation period before Bitcoin blasts off?
Well, bitcoin has done it again. Unsurprisingly, btc bounced off the 200-day MA after an impressive run up to $9,990. While a pull back from the 10K resistance was anticipated, the ensuing 9% drop was a bit harsher than expected which have led to temporarily rattled cryptocurrency markets.
Btc dropped below the $9,200 support level and a quick glance at the top 10 cryptocurrencies shows a bit of red as a handful have pulled back 10 to 15%. While the pullback from $9,990 indicates bullish exhaustion, overall market sentiment remains positive as the cryptocurrency market capitalization inches towards $500 billion.
All FUD aside, impressive developments that are likely to accelerate BTC momentum are occuring as we breathe. Rumor has it that the New York Stock Exchange (NYSE) intends to offer BTC swap contracts that will be settled in BTC rather than fiat. Goldman Sachs confirmed that they will open a cryptocurrency trading desk within the next few weeks and bitcoin colossus Mike Novogratz has taken another swing at opening a crypto trading index.
Next week New York will host the world’s largest cryptocurrency conference (Consensus) and the excitement surrounding this momentous event could also stir up a little bitcoin rally next week.
Last week proved to be predominately bullish as BTC leaped through multiple resistance levels only to run out of steam at $9,990. Throughout the April rally BTC failed to cross the 200-Day MA and yesterday it sunk to a weekly low below $9,000 as the bears broke the $9,200 support and continued their work on the $9,000 support.
BTC has racked up lower lows and lower highs, falling below the ascending trendline and indicating short term weakness as the bears attempt to take charge.
Throughout the day BTC has attempting to recover lost ground and sits slightly above the $9,200 support, fluctuating between $9,100 and $9,300 on the 4 hour chart. A glance at the 5, 10, 20 and 50-day simple moving averages show the dissolution of bullish bias and earlier readings of the RSI, Stoch and MACD sat below bearish territory, indicating further price decline. At the time of writing, the Stoch and RSI have spiked back into bullish territory and the 10-day MA now angles upward and closer to the 5 which is beginning to flatten out.
4 Hour Chart
BTC needs to cross the 50 SMA at $9,450 and previously movement past $9,500 opened the door towards $9,700 and eventually $10,000. A BTC price above $9,780 would place the cryptocurrency back into the ascending channel and a close above the 50 SMA ($9,450) would signal that the current pullback has ended.
In event that BTC is unable to escape the current pullback, there is strong support at $8800 and $8350 and BTC could trade within this range before a rally to $10,500 – $11,200 continues.
BTC is in a short-term pullback and the situation should improve as $9,500 is passed and the 200-day remains a major resistance. BTC will encounter resistance at $10,500, $11,250 and $11,750.
If the downtrend continues and BTC closes below $9,000 a drop to $8,800 and below could occur. Bearing this in mind, aggressive traders and swing traders should take caution and initiate 50% positions whereas longs could add to their positions.