Having recovered from a five-day low hit yesterday, bitcoin (BTC) has potential for a move higher towards major resistance at $9,880, the technical charts indicate.
The cryptocurrency moved back above $9,000 in the Asian hours after the pullback from the recent high of $9,767 ran out of steam around the ascending (bullish) 4-hour 50-candle moving average (MA).
As of writing, BTC is trading at $9,251 on Bitfinex, representing marginal losses over the previous day’s close (as per UTC) of $9,270.
A bearish follow-through to Wednesday’s bearish outside-day reversal would have been bad news for the bulls, but BTC instead appreciated by 4.5 percent on Thursday, keeping them in the game. Had BTC closed yesterday below $8,765 (Wednesday’s low), the bears would have had the upper hand for the short-term.
The above chart also shows the 5-day MA and the 10-day MA are trending north, indicating a bullish setup. The fact that bitcoin found takers below the 10-day MA yesterday and jumped above the 5-day MA only adds credence to the bullish nature of the moving averages.
Moreover, pullbacks tend to be short-lived as long as the short-term averages are trending north, unless there is a major negative fundamental news.
BTC bounced off the 50-candle MA yesterday, establishing it as a strong support. The major moving averages – 50, 100, 200 – are trending north in favor of the bulls.
The pullback seems to have ended at $8,652, leaving bitcoin set to scale the resistance at $9,280 (double top neckline) and rise towards the 200-day MA located at $9,878.
Bear scenario: A failure to take out $9,280 and a drop below the previous day’s low of $8,652 would establish lower highs and lower lows pattern (bearish setup) and would strengthen the case for a deeper pullback to $7,823 (April 17 low).