Bitcoin reversed after a sharp dip towards the $8,400 support area against the US Dollar. BTC price is now signaling more upsides above $8,800 and $9,000 in the coming sessions.
- Bitcoin price bounced sharply and formed a bullish engulfing pattern above $8,550 against the US Dollar.
- The bulls are likely to take control once the price surpasses the $8,800 resistance area.
- There was a break above a key declining channel with resistance near $8,665 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair might dip a few points, but a break above the $8,800 resistance area is very likely.
Bitcoin Forming Bullish Candlestick Pattern
Recently, there was a sharp dip in bitcoin from the $8,750 area against the US Dollar. BTC price spiked below a couple of important supports, but it bounced back above $8,500.
As a result, there was a strong bullish engulfing pattern formed on the hourly chart and the price settled above the $8,500 support area. The recent increase was technically significant, suggesting the bulls rejected the $8,500 support.
Moreover, there was a break above a key declining channel with resistance near $8,665 on the hourly chart of the BTC/USD pair. Bitcoin price even climbed above the $8,700 level.
It is currently testing the 100 hourly simple moving average and struggling to gain strength above $8,780-$8,800. If there is a clear break above the $8,800 resistance and the 100 hourly SMA, bitcoin is likely to accelerate higher.
In the mentioned bullish case, an initial target could be $9,000. A successful follow through above the $9,000 resistance might start a strong rise towards the $9,200 and $9,300 resistance levels.
Any further gains may perhaps start a larger upward move above towards the $10,000 and $11,000 levels in the coming days.
Key Supports For BTC
If BTC fails again to clear the $8,800 resistance and the 100 hourly SMA, it could correct a few points. An initial support is near the $8,670 level or the channel resistance area.
The first key support on the downside is near the $8,560 level, below which bitcoin is likely to retest the main $8,500 support area. Only a daily close below $8,500 might negate the current bullish view.
Technical indicators:
Hourly MACD – The MACD is now gaining momentum in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently well above the 50 level, with positive signs.
Major Support Levels – $8,560 followed by $8,500.
Major Resistance Levels – $8,800, $8,810 and $9,000.
