Having witnessed a major bullish breakout, bitcoin (BTC) is now struggling to find acceptance above the $9,000 mark.
The cryptocurrency crossed the long-term descending trendline (drawn from the Dec. 17 high and Jan. 6 high) in a convincing manner and closed well above the resistance at $8,459 on Friday, signaling a bearish-to-bullish trend change.
However, in the last 48 hours, BTC has struggled to hold on to gains above $9,000 over the weekend, indicating bullish exhaustion around the key resistance.
As of writing, bitcoin is changing hands at $8,940 on Bitfinex – up almost 40 percent from the April. 1 low of $6,425.
The chart above shows that BTC created a small doji candle on Saturday, marking indecision in the marketplace. When viewed against the backdrop of a 40 percent rally from $6,425, the doji likely signals bullish exhaustion.
Further, BTC reported losses on Sunday, confirming a bearish doji reversal pattern.
The cryptocurrency is showing signs of exhaustion near a strong resistance zone of $9,177–$9,280, indicated by the following factors:
- $9,177: March 21 high.
- $9,278: 23.6 percent Fibonacci retracement of the sell-off from the Dec. 17 high to Feb. 6 low.
- $9,285: 100-day moving average (MA).
- $9,280: Feb. 25 low.
The short-duration chart below also shows overbought conditions and scope for a pullback.
The relative strength index has turned lower from the overbought territory (above 80.00) and is creating lower highs, despite BTC's price remaining steady around $8,900. The bearish divergence adds credence to signs the signs of bullish exhaustion seen in the daily chart.
However, any pullback will likely be short-lived, as the major moving averages (50, 100 and 200) are trending north in favor of the bulls.
- Signs of bullish exhaustion near the key resistance zone indicate scope for a minor pullback, possibly to the ascending 10-day MA located at $8,423.
- Longer term, BTC looks set to test the 200-day MA lined up at $9,784 and could possibly test the $10,000 mark.
- Only a daily close (as per UTC) below the descending trendline support (former resistance) would signal bullish invalidation.
Bitcoins image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.