Bitcoin (BTC) pulled back from a 12-month high hit earlier today. However, bulls are still in full control, with price holding far above key support at $ 8,390.
Market leader cryptocurrency jumped to $ 8,940 on Bitstamp at 01:00 UTC today, the highest level since May 11, 2018.
The gains since faded slightly, with the cryptocurrency currently trading at $ 8,750, which is a 9 percent gain on a 24 hour basis.
The $ 200 drop from the weekly highs seen over the last nine hours is probably nothing more than a bull bull, often seen as a result of a significant rise in price. After all, the BTC rose by 8.29 percent on Sunday – the fourth largest one-day gain in May.
More importantly, the bulls finally managed to break a convincing break above $ 8,300, having failed at least three times in the 11 days prior to clinging to profits above the psychological level.
Prices also found a parallel over July 2018 high of $ 8,500 yesterday.
So, the rally from low below $ 6,000 seems to have just returned and a rapid drop below $ 8,000 would weaken the bullish case.
The BTC closed much above May 16 of $ 8,390 on Sunday, confirming a flag breakout – a continuation pattern that usually accelerates the previous move.
This type of breakout is often followed by a step upwards about the length of the flag of the “pole” (the height of the previous bull move) – in this case from $ 5,562 to $ 8,390).
The BTC, therefore, has a scope to converge at least to $ 10,000 (psychological resistance) in the near term.
Bullish case support is Chaikin’s cash flow index of .24 – the highest reading since April 10 – that is, buying pressure is strongest for its nearly six weeks.
Furthermore, moving averages 5 – and 10 days (MA) are trending north, indicating a short term bullish plan. As a result, these averages, currently located at $ 8,288 and $ 8,048, respectively, and may eliminate price withdrawals, if any.
BTC’s 4-week run of the BTC is backed by five-month highs in the Chaikin Silver Index – meaning that buying pressure is the strongest since mid-December,
5 and 10 weeks MAs also sloping upward in favor of the bulls.
While Relative Strength Index (RSI) reports overbought conditions with over 70 print, the cryptocurrency does not show signs of bullish exhaustion. The RSI signal is stopped.
In conclusion, BTC is expected to break above $ 9,000 in the short term, and may rise to $ 9,442 – Fibronaci 38.2% from December 2007 to December 7, 2017.
It is worth noting that prices are now more than 65 percent on a month-to-date basis. Pullbacks due to taking profit are generally observed following such star rallies.
As a result, the possibility of BTC revisiting former resistance, turned to the support area of $ 8,390 – $ 8000 before rising to $ 9,442 can not be ruled out.
On a yearly updated basis, bitcoin is now up to 136 percent.