Bitcoin bulls risk losing control unless prices see a convincing break above the $9,000 mark soon, according to the technical charts.
Of concern is that the cryptocurrency has failed twice to hold above $8,900, as indicated by CoinDesks's Bitcoin Price Index (BPI). Further, bitcoin also clocked a six-day high of $9,070.64 on Feb. 10, but quickly fell back below the key psychological level of $9,000.
Thus, the area around the $9,000 mark has been established as a point of stiff resistance, as is being discussed by the investor community.
As of writing, bitcoin's global average price on the BPI is at $8,390. The cryptocurrency has appreciated by at least 40 percent from the recent lows below $6,000. However, the bulls are still not out of the woods and need to move prices quickly above $9,000 or the bears could once more exert their influence.
That said, exhaustion around $9,000 has neutralized the immediate outlook and bearish revival is seen only below Feb. 2 low of $7,845.
Daily chart: Stuck in a falling channel
The above chart (prices as per Coinbase) shows:
- BTC is trapped inside a falling channel marked by trendlines representing lower highs and lower lows.
- Both the bullish 5-day moving average (MA) and 10-day MA crossover and an upside break of the descending trendline on the RSI favor the upside.
- Still, the cryptocurrency faced rejection at the descending trendline/falling channel hurdle earlier today and is now changing hands below $8,500.
Daily chart: Long-term momentum studies turn bearish
- The longer-term 50-day MA and 100-day MA (momentum studies) will likely see bearish crossover (50-day MA cuts 100-day MA from above) in a day or two (marked by circle).
- Further, the 200-day MA has shed bullish bias (is no longer sloping higher in favor of the bulls).
As discussed yesterday, the weekly chart is biased towards the bears. Thus, the bulls need progress soon,via a quick move above $9,000.
A close above $9,000 would confirm an upside break of the falling channel, meaning bearish-to-bullish trend change. It would also add credence to the bullish 5-day MA and 10-day MA crossover and open doors for a move higher to $11,500–$11,800.
However, gains above $10,000 could be short-lived as detailed in the previous post.
On the other hand, a close below $7,851 (Nov. 2 low) would signal the corrective rally from Feb. 6 low has ended and would encourage stronger sell-off to $5,000.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.