Bitcoin Price Rally to $9K in Danger as a Double Top Pattern Appears

CoinTelegraph

Over the last few hours, Bitcoin price (BTC) swiftly dropped 3% from $8,863 to $8,557 and for the third time in 24 hours bulls were forced to defend the $8,600 support level, which has currently been bought into on each dip. 

The pullback came after the digital asset struggled to rise above $9,000, twice testing $8,863 over the past day, which could be interpreted as a take profit signal for traders. 

Cryptocurrency market weekly overview. Source: Coin360

BTC USD daily chart. Source: TradingView

At the time of publishing, the price remains above the descending channel trendline at $8,300 and the 200-day moving average, which is located at $8,173. The 200-DMA is also slightly above the 38.2% Fibonacci retracement level at $8,093 and the pattern of higher lows remains intact. 

Binance Banner  

On Jan. 15, Cointelegraph contributor Michaël van de Poppe tweeted that a pullback to $8,400 would be healthy. 

BTC USDT daily chart. Source: TradingView

If such a move were to occur over the next 24 hours, the price would bounce off the ascending trendline and 23.6% Fibonacci retracement to have another go at $9,000. Failure to hold above $8,300 would see Bitcoin retest the soft support at the 200-DMA and below this traders will look for a golden pocket bounce off the 50-DMA and 61.8 Fibonacci retracement level at $7,775. 

Some traders have noticed that an M-Top can be seen on the 4 and 6-hour time frame and cautioned that this is an ominous sign. Similar patterns developed after Bitcoin’s June 2018 rally to $13,800 and also after the digital asset reached an all-time high in December 2017. 

BTC USD 6-hour chart. Source: TradingView

Right now, it is a bit premature to call a reversal based on the supposed “M-top” and traders should watch to see if Bitcoin can hold the $8,600 to $8,548 zone (highlighted in pink). 

If this zone gives way and the current ascending trendline and the descending channel trendline are breached at $8,300 then traders will look for a bounce at the 50-DMA ($7,775). 

Coinbase Banner  

A minor pullback and a period of consolidation over the short term seem routine as the relative strength index (RSI) and moving average convergence divergence indicators show that the current rally was becoming overbought as buyers struggled to push through $9,000. 

BTC USD daily chart. Source: TradingView

In the event of a stronger pullback, traders who already took profit at $8,900 will most likely wait to see if Bitcoin price can bounce off the descending channel trendline or consider buying on strength on the price manages a 4-hour close above $9,100 where this is support ranging from November 2019 all the way to July 2019. 

Bitcoin daily price chart. Source: Coin360

The overall cryptocurrency market cap now stands at $237.2 billion and Bitcoin’s dominance is 66.6%. Altcoins that recently posted phenomenal gains have also cooled off as Bitcoin SV (BSV) pulled back 16.47% and Bitcoin Cash (BCH) dropped by 3%. After a brief pullback, Dash (DASH) has continued its rally, gaining 4% over the last 24-hours.

Keep track of top crypto markets in real time here

Go to Source
Author: Horus Hughes


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

FreeBitcoin Banner  

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.