- Bitcoin price continues in consolidation above $8,600 support.
- The channel support has been tested twice and is likely to be the stepping to for Bitcoin’s ascend to $9,000.
Bitcoin is showing strength and determination to sustain the shallow recovery made from the support on Monday at $8,500. Unfortunately, not much of recovery movements are being observed at the momentum, following Bitcoin stalling at $8,700. The 4-hour chart clearly shows the bulls on a mission to defend the short term support at $8,600.
The immediate upside is capped by the 50 Moving Average (MA). The resistance at $8,700 is still in place and it appears that Bitcoin will take a while before breaking past this level unless a catalyst comes Bitcoin’s way unexpectedly.
For now, the immediate downside is supported by the ascending channel (lower trendline). The support has been tested three times since the beginning of January and all those times, Bitcoin has emerged very bullishly. Therefore, as long the channel support holds, I expect Bitcoin to bounce back towards $9,000 in due time, probably before the end of this week.
BTC/USD 4-hour chart
In a scenario where the channel support surrenders to the selling pressure, Bitcoin will resort to Monday’s support at $8,500. If further declines ensue, $8,400 should come in handy but if push comes to shove, the bulls will seek balance at $8,250 and $8,000 respectively.
According to technical indicators such as the Relative Strength Index (RSI), Bitcoin could push the current sideways trading a while longer. This also gives the bulls time to recuperate and get ready for the assault towards $9,000.
Bitcoin Key Levels
Spot rate: $8,655
Relative change: +26.67
Percentage change: +0.31%
Key support: $8,600, $8,500 and $8,250.
Main resistance: $8,700 and $9,000.
RSI: Ranging trend hints further sideways trading.