Bitcoin’s surge to $8,935 was a respite that was an absolute must, especially with the recent collapse in its value. More of this rally cannot be expected without a small retracement. At the time of writing, BTC was trading at $8,668 with a market cap of $160 billion and a $40 billion in trading volume for the last 24 hours.
As the stock markets recuperated with a massive surge, so did bitcoin but the rally could be at its end, at least in the short term.
- Bitcoin’s rally might be stopped by resistance at $8,935. Further price appreciation would need strong buying pressure.
- Failing to breach the aforementioned level would cause the price to depreciate in value, leading it back to $8,495.
Four Hour Bitcoin Chart
The price showed a consistent climb from $8,495 to $8,935, just below $9,000 level. However, this was due to a failure of the selling pressure to push the price below $8,495. Furthermore, the rally was due to a breach from a bullish pattern – falling wedge. Now, bitcoin needs to breach the $8,935 level to continue its rally but the current stance of the buyers shows that it may not be possible.
As seen clearly in the wave trend indicator, the line has reached the centre of the band. The centre of the band represents an interim stop both for a rally and a dip. Regardless of what direction the price moves, this zone will hinder the movement if the momentum is sparse.
Considering the price action, this momentum (buying momentum) is not great, hence there could be a bearish crossover and hence contribute to a retracement. Should this occur, it would be the same as the ones seen during the rallies on 19 and 24, February 2020. However, on the plus side, if the rally continues, it will hit the next resistance at $9,184, which is 2.73% away from its current price.
In the case that this doesn’t take place and the buyer’s exhaust, the price will promptly retrace to $8,495, with a stop at $8,754. This level is crucial because bitcoin has tested this twice. The first time around, bitcoin dipped as low as $8,421, after which, the further collapse was defended by the buyers. The second time, bitcoin tanked to $8,410, again, the bulls defended this level. Hence, if the price breaches this level, a dip would be extremely bearish.