Bitcoin is Showing Early Signs of Fresh Rally, But 100 SMA is the Key
This past week, we saw a steady decline below the $9,000 support in bitcoin against the US Dollar. BTC price made a couple of attempts to bounce back, but it failed and settled below the 100 hourly simple moving average.
On the downside, it seems like the price is finding a significant buying interest near the $9,500 and $9,400 levels. The recent low was formed near $8,403 and the price is currently correcting higher.
It is trading above the $8,450 and $8,500 levels. More importantly, there was a break above a key bearish trend line with resistance near $8,575 on the hourly chart of the BTC/USD pair. It has opened the doors for more gains above the $8,600 level.
The pair is now trading near the 50% Fib retracement level of the recent decline from the $8,821 high to $8,403 low. On the upside, an initial resistance is seen near the $8,660 level and the 100 hourly simple moving average.
The 61.8% Fib retracement level of the recent decline from the $8,821 high to $8,403 low is also near the $8,660 level to prevent gains. If bitcoin price climbs above the $8,700 level and the 100 hourly SMA, there are chances of a decent upward move.
The next key resistance is near the $8,800 area, above which the bulls are likely to take control. In the stated bullish scenario, the price is likely to recover above $9,000 or even $9,200 in the coming sessions.
A downside break below the $8,403 low may perhaps lead the price towards the next set of important supports near $8,200 and $8,000 (as discussed in one of the analyses using the daily chart).