Bitcoin (BTC) is reporting losses today, having failed to beat the key moving average resistance on Monday, however, the technical charts continue to favor a rally to $10,000.
Bitcoin ran into bids in early European hours yesterday, rising to a four-day high of $9,885, adding credence to Sunday's bullish "outside day" candle. Further, BTC also witnessed a bull flag breakout (a bullish continuation pattern) on the hourly chart.
However, the bulls ran out of steam near the 50-day moving average (MA) resistance of $9,920 in the early U.S. hours.
As of writing, bitcoin is trading at $9,297, according to CoinDesk's Bitcoin Price Index (BPI). The cryptocurrency has depreciated by 4.59 percent in the last 24 hours, as per data source CoinMarketCap.
BTC's retreat from the high of $9,900 to $8,770 (prices as per Bitfinex) poured cold water on the optimism generated by the Sunday's bullish outside day candle and the bullish triangle breakout.
Further, it also established the 50-day MA as a strong resistance (seen today at $9,888). BTC alsoclosed yesterday (as per UTC) below the Feb. 25 low of $9,280, marking a failure to hold above the double top neckline.
The momentum studies show bear bias too. The 10-day moving average is sloping downwards, and there's a bearish crossover between the 10-day MA and the 50-day MA. So, it appears the odds are stacked against a move above $10,000.
That said, BTC is still trading well above the long-legged doji candle low of $8,342 set on March 9. The candlestick pattern represents bearish exhaustion.
So, it seems safe to say the odds of a corrective rally are above 50 percent, as long as BTC stays above $8,342.
The hourly chart below shows a bullish 50-MA and 100-MA crossover.
Hence, the cryptocurrency could visit the inverse head-and-shoulders pattern neckline resistance seen around $9,850. An upside break would open doors for $11,000 (target as per the measured height method).
The 4-hour chart favors a rally to $9,850 (inverse head-and-shoulders neckline). An upside break would allow a rally to $10,417 (61.8 percent Fibonacci retracement of the sell-off from the March 5 high of $11,700). A violation there would expose resistance at $11,000 (inverse head-and-shoulders breakout target).
However, the sustainability of gains is under question as the weekly chart shows the relative strength index (RSI) has rolled over in favor of the bears. Thus, only a weekly close above $11,700 would confirm a long-term bearish-to-bullish trend change.
On the downside, a move below $8,770 (previous day's low) could yield a re-test of $8,428 (Sunday's low).
Only a daily close (as per UTC) below $8,342 (long-legged doji candle low of March 3) would add credence to the bearish weekly RSI and open doors for a sustained drop to $6,000 (February low) and $5,400 (Nov. 12 low).
Magnifying glass and USD image via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. 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.
Quebec Pushes Hydropower Utility to Halt New Bitcoin Mines
The Canadian province of Quebec has temporarily put a halt to the development of new cryptocurrency mining operations.
The region - known for its cheap hydropower - has been an attractive destinati
Steve Seagal-Backed 'Bitcoiin' ICO Hit with Regulator Warning
The Securities Division of the Tennessee Department of Commerce and Insurance (TDCI) is warning residents about the Steven Seagal-backed "Bitcoiin" project.
Citing New Jersey's cease-and-desist ord
Ireland's Finance Department Plans Blockchain Working Group
Ireland's Department of Finance has proposed the creation of a new blockchain working group to help create cohesive regulation across government agencies.
Revealed in a new report, titled "Virtual
'Fake News': Russian Official Reportedly Denies Involvement with Petro
The Russian government is pushing back against reports that it helped Venezuela launch its controversial "petro" cryptocurrency.
In public remarks Friday, the deputy director of the Information and
US Government Watchdog: Regulations Are Hobbling DLT Innovation
The complexity of U.S. financial regulations is holding back distributed ledger technology (DLT) startups, the U.S. Government Accountability Office (GAO) says.
The GAO's finding, in a report publi
IRS Reminds US Taxpayers to Report Crypto Earnings
The Internal Revenue Service has reminded U.S. taxpayers to include any cryptocurrency income on their annual tax forms.
In a release published Friday, the IRS noted that cryptocurrency transaction
Smart Contracts Now Recognized Under Tennessee Law
The governor of Tennessee has signed a bill that legally recognizes blockchain data under state law.
Governor Bill Haslam signed the measure on Thursday, public records show, capping a months-long
Nevada digs bitcoin, DC loves Obama: Most popular purchases in every state, according to app Earny
Ever wonder what residents in your neighbor states are shopping for? The most popular purchases by state, it turns out, vary greatly. Earny, an app that gets you money back on things you buy based