After two weeks of gains, the market experienced a low that dropped Bitcoin below $9,000. With a gain of 5% within 24 hours, Bitcoin is back up to trading at $9,251 and is looking to experience more growth over the coming weeks. As of this morning the crypto market is back on track with the top 10 crypto currencies.
Having recovered from a five-day low hit yesterday, bitcoin (BTC) has potential for a move higher towards major resistance at $9,880, the technical charts indicate.
The cryptocurrency moved back above $9,000 in the Asian hours after the pullback from the recent high of $9,767 ran out of steam around the ascending (bullish) 4-hour 50-candle moving average (MA).
As of writing, BTC is trading at $9,251 on Bitfinex, representing marginal losses over the previous day’s close (as per UTC) of $9,270.
A bearish follow-through to Wednesday’s bearish outside-day reversal would have been bad news for the bulls, but BTC instead appreciated by 4.5 percent on Thursday, keeping them in the game. Had BTC closed yesterday below $8,765 (Wednesday’s low), the bears would have had the upper hand for the short-term.
The above chart also shows the 5-day MA and the 10-day MA are trending north, indicating a bullish setup. The fact that bitcoin found takers below the 10-day MA yesterday and jumped above the 5-day MA only adds credence to the bullish nature of the moving averages.
Moreover, pullbacks tend to be short-lived as long as the short-term averages are trending north, unless there is a major negative fundamental news.
BTC bounced off the 50-candle MA yesterday, establishing it as a strong support. The major moving averages – 50, 100, 200 – are trending north in favor of the bulls.
The pullback seems to have ended at $8,652, leaving bitcoin set to scale the resistance at $9,280 (double top neckline) and rise towards the 200-day MA located at $9,878.
Bear scenario: A failure to take out $9,280 and a drop below the previous day’s low of $8,652 would establish lower highs and lower lows pattern (bearish setup) and would strengthen the case for a deeper pullback to $7,823 (April 17 low).
Bitcoin and USD image via Shutterstock