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.
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.
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.
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.
BItcoin rose past $9,188 on Wednesday with a positive “marubozu candle,” indicating that bullish sentiment is quite strong.
Further, the 5- 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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