- A four-month down trend line proved to be a difficult problem to resolve during Asian trading hours and reversed the Bitcoin hike from $ 9,200 to $ 9,500. The outlook, however, would only become bearish under the average 200-day support at $ 9,127.
- The decline, from $ 9,500 to $ 9,200, lacked volume support and may be short-lived.
- A higher volume close to $ 9,470 UTC is needed to confirm a break up the trend line down several months and open the doors to $ 13,880 (2019 peak).
- An acceptance below the 200-day MA would weaken the immediate uptrend. The resulting sale of $ 8,500, if any, will likely be transitory.
Bitcoin's (BTC) fight for a bullish escape continues with a declining trend line that limits earnings for a fifth time in 11 days.
The best cryptocurrency is currently trading in the red near $ 9,300 on Bitstamp, having been rejected close to $ 9,470 – the resistance of the trend line connecting the peaks of June 26 and August 6 – during the hours trading in Asia.
The four-month trend, down from the peak of $ 13,880 in 2019, came into effect on October 31. On this day, prices peaked at $ 10,350 but failed to print a UTC closure above the resistance line.
A similar price movement was observed the following two days and Monday, when prices went from $ 9,200 to $ 9,586, their highest level in a week, but failed to break the trend.
The repeated failure of the downward trend over several months could force some investors to question the sustainability of the recent rise, which has gone from its lowest level below $ 9,500 over five months.
However, these fears may be premature, as prices stay above 200 days of AM support, a barometer of long-term market trends, as shown in the graph below.
BTC still struggles to exceed the decreasing trend line, currently at $ 9,470. Even then, it's too early to call a bearish turnaround, as 200-day MA support at $ 9,127 is intact.
The average has been limited downward since October 30, after having worked as a resistance several times in the 16 days before October 11th.
In total, BTC lies between the medium long-term support and the downside resistance of the trend line.
A UTC volume close to USD 9,470 is needed to confirm an upside break in the declining trend line. This would imply a rebound in the bull market after hikes close to $ 4,100 observed in early April and an open door to resistance at $ 13,880.
On the other hand, an inferior acceptance of the 200-day, 200-day, $ 9,127 long-term assistance will likely incite stronger selling pressure, leading to a drop to $ 8,500.
A breakout seems likely, as the cryptocurrency tends to take a strong offer six months before half of the reward, as reported last week.
Note that the recent withdrawal of $ 10,350 was not supported. Essentially, it represents a bull snuff and could be reversed.
BTC jumped from $ 9,273 to $ 9,586 in the 60 minutes to 22:00 UTC Monday with a buying volume (green bar) reaching its highest level since Oct. 31.
Indeed, the rise was erased with prices falling to $ 9 165 a few hours ago but with low transaction volumes. As a result, the possibility of BTC reaching highs close to $ 9,600 can not be ruled out.
Disclosure: The author does not hold any cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View