Bitcoin Looks for Price Support After Failed $10K Crossover
Bitcoin’s (BTC) pullback in prices over the weekend has dampened the immediate prospects for the bulls, the technical studies indicate.
Having witnessed a bullish pennant breakout last Friday, the cryptocurrency looked set to scale the $10,000 mark in a convincing manner over the weekend.
However, the bullish move unexpectedly ran out of steam at $9,990 at 13:00 UTC on Saturday, according to Bitfinex, and had retreated to $9,258 earlier today.
As of writing, bitcoin is changing hands at $9,400, representing a 2.67 percent drop from the previous day’s close of $9,658.
While the pullback is not good for the bulls, only a drop below $8,650 would give the bears the upper hand.
The above chart shows the pullback occurred after BTC was rejected (marked by a circle) at the inverse head-and-shoulders neckline resistance of $9,950.
As noted above, BTC had looked on a solid ground following the bull pennant breakout, so the drop to $9,300 came as something of a surprise and has neutralized the immediate bullish outlook.
That said, a rebound from the ascending (bullish) 100-candle moving average (MA) in the 4-hour chart could put $10,000 back on the map.
The daily chart shows that the 10-day MA is sloping upwards (bullish), providing more cause for bull optimism, especially if today’s candle closes (as per UTC) above the 10-day MA (located at $9,468).
On the other hand, if BTC closes below the 10-day MA, then the case for a further drop towards $8,652 (April 26 low and pennant low as seen in 4-hour chart) would strengthen.
The pullback from $9,990 to $9,258 has dampened the immediate bullish outlook.
Repeated failure on the part of the bears to keep prices below the ascending 100-candle MA on 4-hour chart, and a close today above the 10-day MA of $9,468, could yield re-test of $10,000.
A close above the inverse head-and-shoulders neckline resistance seen today at $9,980, would open the doors to $13,475 (target as per the measured height method), although the target looks far-fetched for now. In the short-run though, BTC could rise to $11,700 on the back of an inverse head-and-shoulders breakout.
Bearish scenario: A break below $8,652 (pennant low) would add credence to rejection at inverse head-and-shoulders neckline resistance and signal a short-term bullish-to-bearish trend change. In such a case, BTC will likely drop to levels below $8,000.
Bitcoin chart image via Shutterstock