Bitcoin took a pause from its stellar climb as it tested the $14,000 major psychological mark. This has allowed a correction to start, and the Fibonacci retracement tool shows where buyers might be waiting to let the climb resume.
The price is currently testing the 50% level at the $11,000 major psychological mark but still seems to have enough momentum to retrace lower to the 61.8% level at $10,000. An even larger correction could test the $9,000 handle that lines up with the rising trend line that has been holding since the start of May.
The 100 SMA dynamic support is in line with the area of interest around $8,000-9,000 to add to its strength as a floor. This moving average is also above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that the uptrend is more likely to gain traction than to reverse.
RSI is turning lower from the overbought zone to show that sellers are taking over while buyers take a break. Stochastic is heading lower to signal that selling pressure is taking over. Both oscillators have plenty of room to head lower so the price could keep following suit.
BTC/USD Chart – TradingView
Bitcoin rallies have been backed by fundamentals and sentiment, so most bulls don’t seem to be fazed by the recent slide. The price has been on a tear for more than a week already, so the retracement from profit-taking wasn’t all too surprising.
It could even draw more buyers to hop in at better prices, positioning ahead of major developments in the space. For one, the earlier run was seen to have been spurred by anticipation for the “halvening” in May 2020. This was built on by news of Facebook’s Libra coin, which drew mainstream interest into cryptocurrencies that have already been in existence for a while and already weathered many challenges.
Images courtesy of TradingView
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