The bulls’ repeated failure to take out resistance around $9,000 has boosted the odds of a pullback in bitcoin prices, according to the technical charts.
The cryptocurrency scaled the $9,000 mark on Tuesday, signaling a short-term bullish reversal. However, BTC has spent a better part of the 48 hours since trading the narrow range of $8,700-$9,200, as per CoinDesk’s Bitcoin Price Index (BPI).
The move above $9,000 coincided with Tether’s latest token issue. The company printed 300 million new USDT via OMNI, pushing the yearly total close to $850 million. Comments on social media indicated that investors were expecting a solid rally in bitcoin (BTC) prices after the issuance of the USD-pegged crypto, but it wasn’t to be.
The exhaustion above $9,000 is not surprising: BTC has rallied close to $2,000 from the March 18 low of $7,335 without a notable pullback. Further, multiple key resistance levels are lined up in the $9,180-$9,470 range, as discussed yesterday. Also, the upside is being capped by the descending 100-MA (moving average), the 4-hour chart shows.
As of writing, the BPI is seen at $8,718. The global average price, as calculated by CoinMarketCap, stands at $8,773 – down 3.38 percent in the last 24 hours.
The price chart analysis indicates scope for a pullback if the bulls fail to defend support at $8,750.
The above chart (prices as per Bitfinex) shows:
- A rising wedge reversal, a bearish continuation pattern, meaning the downside break seen yesterday marks the resumption of the sell-off from the March 12 high of $9,900.
- A double top-like pattern with the neckline support at $8,752.
Acceptance below $8,752 would only add credence to the rising wedge reversal and open the doors for a drop to 200-hour moving average (MA) located at $8,377.
Bitcoin created a doji candle yesterday at the 200-day MA resistance, signaling indecision among the bulls. A close (as per UTC) below $8,752 (previous day’s low) today would indicate the corrective rally from the low of $7,240 has ended.
Note, trading volumes have dropped in the last three days, putting a question mark on the sustainability of the gains.
- An hourly close below $8,752 could yield a pullback to $8,377 (200-hour MA).
- A daily close (as per UTC) below $8,752 would add credence to bearish weekly chart. BTC could then revisit recent lows below $7,300.
- Bull scenario: a convincing move above $9,500 would allow a test of supply around the psychological hurdle of $10,000.