Drop to $9K Still in Play Despite Brief Bitcoin Rally

Despite a brief rally yesterday, bitcoin (BTC) is still in corrective mode and risks falling back below $9,000, chart analysis suggests.

The cryptocurrency broke out of the bearish falling channel setup Wednesday, courtesy of a bullish relative strength index (RSI) divergence – indicating the pullback from the recent high of $9,990 had ended at a low of $8,980.

The breakout also raised the prospects of a stronger move towards $9,767 (April 25 high) and possibly even the $10,000 mark.

However, the ascent has been cut short around $9,380 in the last 15 hours, as seen in the hourly chart below.

Hourly chart

As of writing, bitcoin is attempting a break above $9,380 on Bitfinex, above which a major resistance is seen at $9,442 – the 200-hour moving average (MA). Meanwhile, a strong support is seen at $9,228 (marked by a circle).

The momentum studies are biased bearish. For instance, the 100-hour MA is trending south in favor of the bears and the 50-hour MA is still gradually descending (yet to bottom out or shed bearish bias).

As a result, a convincing move above $9,442 could be a tough task.

Further, the short-term moving averages in the daily chart have rolled over in favor of the bears.

Daily chart

The bearish crossover between the 5-day MA and the 10-day MA indicates a short-term (5 days) bullish-to-bearish trend change. It also indicates the pullback from the recent high of $9,990 has not run its course.

View

  • A break below $9,228 (support on the hourly chart) would add credence to the bearish 5-day MA and 10-day MA crossover and open the doors for a drop to $8,980 and $8,868 (100-day moving average).
  • A daily close (as per UTC) below $8,652 (April 26 low) would confirm a bearish reversal.
  • On the higher side, a daily close (as per UTC) above the 10-day MA (currently located at $9,452) would signal the end of the pullback from the recent high of $9,990.

Arrows image via Shutterstock

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