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Bitcoin Reinforces Latest Rally With Defense of $9,200 Price Support

Omkar Godbole

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  • Bitcoin’s defense of the former hurdle-turned-support at near $9,190 has strengthened the case for a continued rally toward higher resistance levels.
  • Longer duration charts are aligned in favor of a move to $10,000.
  • A channel breakdown on the hourly chart would shift risk in favor of a deeper pullback to the 200-day average at $8,900.

Bitcoin defended key price support early on Thursday, strengthening the case for another move higher.

Having faced rejection above $9,400 multiple times on Wednesday, the top cryptocurrency by market value came under pressure during the Asian trading hours today. Buyers, however, absorbed the selling pressure at $9,188, keeping the former resistance-turned-support intact.

Bitcoin had reversed lower from the same $9,188 hurdle on Jan. 14, aborting the short-term bullish view. So as the cryptocurrency bounced up strongly from $8,250 earlier this week, traders wondered whether bitcoin will again fail at $9,188 and form a double-top bearish reversal pattern or cross the hurdle with conviction.

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The latter case won the day and the bulls managed to push prices well above $9,188 on Wednesday, flipping the resistance into support and establishing a new higher high.

At press time, bitcoin is changing hands at $9,350, according to CoinDesk’s Bitcoin Price Index.

Hourly chart

Bitcoin is moving in a sideways channel on the hourly chart. A move above channel resistance at $9,452 would likely accelerate the recent rally and open the doors to $9,600 (channel range added to breakout price). A violation there would expose the psychological resistance at $10,000.

The RSI is no longer reporting overbought conditions and is currently in bullish territory above 50.

Related: Bitcoin Eyes Best January Close in 7 Years After 30% Price Increase

With the longer duration charts also biased bullish, the odds appear stacked in favor of a range breakout. Should the range be breached to the downside, a deeper pullback to the 200-day average at $8,900 may be seen.

Daily chart

BItcoin rose past $9,188 on Wednesday with a positive “marubozu candle,” indicating that bullish sentiment is quite strong.

Further, the five- and 10-day averages are trending north so dips, if any, are likely to be short-lived.

A bearish reversal would be confirmed only if prices print a UTC close below $8,213 (higher low created on Jan. 24). Currently, that looks unlikely.

Disclosure: The author does not currently hold any digital assets.

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