Bitcoin to breach $9,000, not $9,100; how far will it retrace?
January 14 was a good day! Bitcoin saw a sudden surge that pushed the price from $8,100 to about $8,500. The surge pushed through and Bitcoin reached $8,900, where it stayed for a while. However, since the second half of January 17, the price seemed to test its boundaries, as it tried to climb up to $9,000 but fell short every time.
At press time, there was a formation of a bearish pattern – Rising Wedge. There is time for the pattern to break out to the downside; however, before that happens, the price needs to surge briefly and bounce off the falling wedge pattern once more. This tiny surge will allow the price to push past the $9,000 psychological level.
With the funding rate and the premium of Bitcoin rising higher on the daily time frame, it is only natural that the price of Bitcoin will follow through. When there if enough follow-up from the longs, the price will push past the $9,000 level, however, as seen in the above chart, there is a resistance $9,100 level. There is a chance that Bitcoin will hit this level in the next 24 hours, it might even reach $9,200, but will not sustain there.
The eventual exhaustion of the longs will allow the bears to take over and push the price into a retracement. This retracement will take Bitcoin back into the pattern and probably an eventual breakout of the rising wedge pattern. This will push Bitcoin to $8,900 and an eventual dip in the $8,900 to $8,500 support zone.
The daily chart of Bitcoin showed the price surge causing the synchronous decline of the 200-MA toward the rising price. There is still a gap between the price and the 200-MA; this gap will be filled at $9,080, which is in the vicinity of the first resistance point mentioned above. Moreover, the price has moved sufficiently above the 2-year moving average, which is, in a way, a bullish sign.
A pump to $9,100 and possibly $9,200 is on the horizon, however, the chances of BTC staying there seem highly unlikely. The surge in price will eventually be followed by a retracement to $8,900 and possibly to $8,800 and $8,500.