Low-Volume Bitcoin Pullback Stalls at Price Support Near $9.6K
Bitcoin defended key support around $9,600 on Sunday with a doji candle, stalling the price pullback and putting the market into neutral.
A break above Sunday’s high of $10,051 is needed to revive the short-term bullish view. That would likely light a fire under buyers, fueling a rise to the recent high of $10,500.
On the downside, Sunday’s low of $9,598 is now the level to beat for the bears.
Bitcoin’s (BTC) price pullback looks to have stalled, with the bears losing steam near former hurdle-turned-support on Sunday.
The number one cryptocurrency by market cap ran into offers over the weekend, having faced multiple rejections near $10,500 on Feb. 12–13.
Notably, the cryptocurrency fell nearly 4.5 percent on Sunday – its biggest single-day decline since Nov. 24 – with sellers driving prices as far as support at $9,615 – a higher high created on Feb. 3. The former resistance level, however, withstood the bear attack.
Related: Golden Cross Gives Little Relief as Bitcoin Risks Fall Below 2020 Bullish Trendline
Bitcoin went on to close Sunday on a flat note above $9,900, forming a doji candle on the daily chart – a sign of hesitation from the bears near the price support.
Daily chart
While Sunday’s doji candle has weakened the case for a deeper pullback, a bull revival is still not confirmed. For that, prices need to find acceptance above Sunday’s high of $10,051.
So far, the positive follow-through to the doji has remained elusive. The cryptocurrency is currently trading around $9,730 on Bitstamp and its global average price, as calculated by CoinDesk’s Bitcoin Price Index, is seen at $9,750.
The immediate outlook would turn bullish if prices rise above $10,051, possibly causing more buyers to join the market and yielding a re-test of the recent high of $10,500.
Related: Craig Wright Doubles Down on Satoshi Claim, Says Bitcoin Core Infringes His ‘Database Rights’
If Sunday’s low of $9,598 is breached, it would mean the period of indecision, as represented by the doji candle, has ended with victory for the bears. In that case, a stronger downside move toward $9,075 (Feb. 4 low) could be seen.
That said, the longer duration studies are still biased in favor of a breakout above $10,051. For instance, the 50- and 200-day averages are about to produce a golden crossover (bull cross) for the first time in nearly 10 months, a pattern that may prompt increased buying pressure.
Weekly chart
The relative strength index is hovering in the bullish territory above 50 and the MACD is producing higher bars above the zero line, a sign of strengthening of bullish momentum.
The five- and 10-week averages are also trending north, indicating a bullish setup.
4-hour chart
The pullback from $10,500 lacks substance as trading volumes have tapered off since Feb. 13. A low-volume price drop is often short lived.
Disclosure: The author holds no cryptocurrency at the time of writing
