$10K Proving a Tough Nut to Crack for Bitcoin’s Bulls
$10K Proving a Tough Nut to Crack for Bitcoin’s Bulls
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- Bitcoin’s immediate outlook remains neutral with a lower-highs setup on 4-hour charts still intact.
- A sustained break above $10,028 would invalidate that pattern and revive the bullish view, opening the doors for resistance at $10,300 and $10,500.
- On the downside, key average support at $9,508 is the target for the bears. A violation there would likely bring a deeper drop to $9,075 (Feb. 4 low).
Bitcoin retreated after crossing into five figures early on Monday, establishing the psychological level of $10,000 as the resistance to beat for the bulls.
After briefly touching $10,008 at 01:30 UTC, according to CoinDesk’s Bitcoin Price Index, the cryptocurrency had fallen back to $9,620 by 03:00.
Bitcoin has now failed twice in the last 24 hours to find takers above $10,000. Another attempt during Sunday’s early U.S. trading hours also saw prices print a high just above $10,000 only to plunge quickly to $9,850.
The failures have poured cold water over the optimism generated by the move higher seen over the weekend. Bitcoin remained resilient around $9,650 on Friday, despite a bearish turn by the money flow index, and rose to five figures on Sunday.
Importantly, with the rejection at $10,000, bitcoin has logged another bearish lower high on the technical charts – one of a succession since the recent rally stalled at $10,500 on Feb. 13.
Invalidation of the lower highs setup is needed to revive the immediate bullish case. As a result, the high around $10,000 observed during Monday’s Asia hours is the level to beat for the bulls.
Bitcoin is currently trading at $9,750 on Bitstamp. Meanwhile, its global average price as calculated by the Bitcoin Price Index is $9,765, down 1.38 percent over 24 hours.
4-hour chart
Bitcoin has printed three lower highs (marked by arrows) on the 4-hour chart over the last 10 days, the latest being $10,028 (as per Bitstamp prices).
A high-volume move above that level would imply a continuation of the broader uptrend from January lows below $7,000 and open the doors for a re-test of the Feb. 13 high of $10,500.
However, at press time, bitcoin is looking south, with the trendline rising from Feb. 19 lows now breached to the downside. So, a drop to the 200-candle average at $9,508 cannot be ruled out.
Acceptance under that technical line, which acted as strong support last week, could bring a deeper slide toward the higher low of $9,075. (Feb. 4 low).
Weekly chart
Bitcoin produced a doji candle last week, as prices swung both ways in the range of $10,300 to $9,300 before closing out on a flat note. The pattern appeared after a notable price rally and is indicative of indecision among buyers.
A strong move above $10,300 would imply bull confidence has returned and would likely yield a stronger move toward $11,000.
Failing that, though, a selloff to below $9,300 would confirm a bearish doji reversal pattern.
The odds of a move above $10,300 would rise if the lower-highs setup on the 4-hour chart is invalidated with strong volumes.
Disclosure: The author holds no cryptocurrency at the time of writing
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