Bitcoin is solidly bid on Tuesday and could test the $10,000 mark in the next few days, chart analysis suggests.
Following a sharp price spike just after midnight (UTC), the cryptocurrency rose to $9,308 on Bitfinex – the highest level since March 14. At time of writing, BTC was trading at $9,291, up 4.2 percent over the last 24 hours.
As suggested by the convincing move above the long-term descending trendline and bullish daily relative strength index, the bulls look to be firmly in control.
However, on the way to $10,000, stiff resistance lies in wait around $9,280 and $9,800, as seen on the chart below.
Currently, BTC is trading very close to the resistance at $9,278 (23.6 percent Fibonacci retracement of the drop from the Dec. 17 high to Feb. 6 low). Further, $9,280 marks the neckline of the bearish double-top pattern seen in the first quarter.
A notch higher, the 200-day moving average hurdle is lined up $9,808, while the March 12 high and Jan 23 low of $9,900 may also prove to be obstacles to the bulls.
Elsewhere, both the 60-minute and 4-hour relative strength indexes (RSIs) show overbought conditions, so an argument could be made that a rally to $10,000 won’t be smooth sailing.
However, a bullish continuation pattern can be seen on the 4-hour chart below, indicating scope for a rally to $10,250.
The bull pennant breakout indicates a resumption of the rally from the April 17 low of $7,823 and has opened the doors for $10,250 (pole height added to breakout price).
The presence of a strong bullish setup will likely overshadow the overbought conditions as shown by the 4-hour RSI (above 70.00) and we will likely see a rally to $10,000 or more.
BTC will likely cross the resistance around $9,280 in a convincing manner and test the 200-day moving average of $9,808 in the short-run. Acceptance above the long-term moving average would further strengthen the bull grip. In such a case, BTC may rise to $10,300 (bull pennant breakout target).
Rejection at $9,280, despite the bull pennant breakout, followed by a drop below 8,930 could yield a pullback to $8,550 (ascending 10-day MA).
Overall, the outlook remains bullish as long as BTC trades above the long-term descending trendline.
Speed bump image via Shutterstock
The leader in blockchain news, 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.