Bitcoin corrected lower from the $9,480 swing high and tested the $8,400 support zone.
It is likely to continue higher and it could rally above the $9,500 resistance.
There is a major bullish trend line forming with support near $8,950 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
The pair could correct a few points, but dips are likely to remain limited below $8,950.
Bitcoin Could Rally Past $10,000
This past week, bitcoin rallied more than 20% and broke the $9,000 resistance against the US Dollar. BTC price traded as high as $9,479 before starting a sharp downside correction.
There was a drop below the $9,200 and $9,000 support levels. The price even declined below the 23.6% Fib retracement level of the upward move from the $7,357 swing low to $7,479 high.
Finally, bitcoin price spiked below the $8,500 support, but the bulls protected the $8,400 level. It tested the $8,420 level and remained well bid above the 100 simple moving average (4-hours). It seems like the price found support near the 50% Fib retracement level of the upward move from the $7,357 swing low to $7,479 high.
It is currently rising and trading above the $8,800 and $8,950 resistance levels. There is also a major bullish trend line forming with support near $8,950 on the 4-hours chart of the BTC/USD pair.
Bitcoin Price
An initial resistance on the upside is near the $9,200 level. A successful break above the $9,200 level could lead the price towards the $9,479 high or the $9,500 resistance level. Any further gains may perhaps call for a move towards the $10,000 resistance.
Downside Correction
If bitcoin fails to continue above the $9,200 resistance level, it could correct lower once again. On the downside, there is a major support forming near $8,950.
If the bulls fail to keep the price above the trend line support, it might decline towards the $8,400 support. The next major support is near the $8,000 pivot level (the previous breakout zone).
Technical indicators
4 hours MACD – The MACD for BTC/USD is about to gain pace in the bullish zone.
4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently well above the 60 level.
Major Support Level – $8,950
Major Resistance Level – $9,500
Take advantage of the trading opportunities with Plus500
Risk disclaimer: 76.4% of retail CFD accounts lose money.