Bitcoin’s price pullback looks to have stalled with the bears losing steam near former hurdle-turned-support on Sunday.
The number one cryptocurrency by market cap ran into offers over the weekend, having faced multiple rejections near $10,500 on Feb. 12–13.
Notably, the cryptocurrency fell nearly 4.5 percent on Sunday – its biggest single-day decline since Nov. 24 – with sellers driving prices as far as support at $9,615 – a higher high created on Feb. 3. The former resistance level, however, withstood the bear attack.
Bitcoin went on to close Sunday on a flat note above $9,900, forming a doji candle on the daily chart – a sign of hesitation from the bears near the price support.
While Sunday’s doji candle has weakened the case for a deeper pullback, a bull revival is still not confirmed. For that, prices need to find acceptance above Sunday’s high of $10,051.
So far, the positive follow-through to the doji has remained elusive. The cryptocurrency is currently trading around $9,730 on Bitstamp and its global average price, as calculated by CoinDesk’s Bitcoin Price Index, is seen at $9,750.
The immediate outlook would turn bullish if prices rise above $10,051, possibly causing more buyers to join the market and yielding a re-test of the recent high of $10,500.
If Sunday’s low of $9,598 is breached, it would mean the period of indecision, as represented by the doji candle, has ended with victory for the bears. In that case, a stronger downside move toward $9,075 (Feb. 4 low) could be seen.
That said, the longer duration studies are still biased in favor of a breakout above $10,051. For instance, the 50- and 200-day averages are about to produce a golden crossover (bull cross) for the first time in nearly 10 months, a pattern that may prompt increased buying pressure.
The relative strength index is hovering in the bullish territory above 50 and the MACD is producing higher bars above the zero line, a sign of strengthening of bullish momentum.
The 5- and 10-week averages are also trending north, indicating a bullish setup.
The pullback from $10,500 lacks substance as trading volumes have tapered off since Feb. 13. A low-volume price drop is often short lived.
Disclosure: The author holds no cryptocurrency at the time of writing
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