- Bitcoin's short-term bullish view remains intact.
- Daily chart indicators are biased bullish, while the 4-hour chart is reporting a bullish reversal pattern. So BTC could rise to $9,000 in the days ahead.
- The bullish case would weaken if prices drop below key support at $8,110.
Bitcoin (BTC) continues to look north and may rise to $9,000 in the short-term despite a U.S. regulator's decision to reject a bitcoin exchange-traded fund (ETF) proposal.
The U.S. Securities and Exchange Commission (SEC) on Wednesday announced that the ETF proposal filed by Bitwise Asset Management in conjunction with NYSE Arca did not meet the necessary requirements to prevent market manipulation and illicit activities.
The top cryptocurrency by market value hit a two-week high of $8,708 on Bitstamp and retreated to levels below $8,550 before CoinDesk reported the SEC's decision at 21:45 UTC yesterday.
However, BTC remained bid following the negative news and has been restricted largely to a narrow range of $8,500–$8,650 in the hours since.
The cryptocurrency's resilience is not surprising, as the market had set its bar of expectations low following the regulator's repeated rejection of various ETF proposals over the last 12 months. Further, the low odds of the SEC approving the ETF had been priced in long ago, according to popular analyst Alex Kruger.
Bitcoin's ability to hold on to gains may indicate Wednesday's rally was primarily driven by the U.S. Federal Reserve's decision to expand its balance sheet again.
Many observers had associated the price rise with speculation that the SEC might approve a new bitcoin-based ETF. If that had been the case, the cryptocurrency would have faced a sell-off following the regulator's decision.
All-in-all, the doors remain open for BTC to continue rising amid the Fed's move to increase its balance. As of writing, BTC is changing hands at $8,530 on Bitstamp, representing 3.54 percent gains on a 24-hour basis.
Short-term technical studies are calling a move higher toward $9,000, as seen below.
Daily chart and weekly chart
Bitcoin jumped 5 percent on Wednesday, confirming the impending trend reversal signaled by Monday's bullish outside-bar candlestick pattern.
The MACD histogram is now producing higher bars above the zero line, indicating a strengthening of bullish momentum.
Hence, BTC could find acceptance above the 200-day moving average (MA) resistance at $8,632 and rise toward the former support-turned-resistance of $9,049 in the short-term.
On the way higher, BTC could face resistance at $8,951 – the descending (bearish) 5-week moving average.
BTC jumped above $8,531 yesterday, confirming a double bottom breakout on the 4-hour chart and opening the doors for $9,348 (target as per the measured move method).
So far, the follow-through has been poor and the cryptocurrency is now teasing a drop below the former resistance-turned-support of $8,531.
That, however, should not be a cause for concern for the bulls, as markets often shake out weak hands by testing dip demand before building on a bullish breakout.
Moreover, the short-term bullish case will remain intact as long as prices are holding above the higher low of $8,110 created on Oct. 9.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
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