Resistance Ahead: Bitcoin Bulls Seek Move Above $8,500 – CoinDesk

A move above resistance at $8,500 would provide confirmation bitcoin’s bear market has ended, the technical charts indicate.

Over the weekend, the cryptocurrency clocked a three-week high of $8,458 on Bitfinex, adding credence to the short-term bull reversal confirmed last Thursday. Further, the 30 percent rally from $6,425 (April 1 low) proved that the much-feared “death cross” indicator was in fact a bear trap.

Still, the job is only part done, as bitcoin (BTC) has yet to violate the descending trendline established since Dec. 17.

Daily chart

Resistance Ahead: Bitcoin Bulls Seek Move Above $8,500 - CoinDesk

As seen in the chart above, the descending trendline, representing a series of lower price highs over the last four months, is still intact. The trendline hurdle is seen around $8,500. The 50-day moving average (MA) is also lined up at 8,516.

A high volume break above the confluence of the trendline and the 50-day MA could be considered the final confirmation of the bearish-to-bullish trend change.

That said, BTC’s first attempt to scale the key resistance failed – running out of steam at $8,415 and falling back to $8,100 this morning. As of writing, the ascending (bullish biased) 5-day MA is capping the downside in prices.

There may be clues as to the reason for the retreat in the short-duration chart below.

4-hour chart

Resistance Ahead: Bitcoin Bulls Seek Move Above $8,500 - CoinDesk

The bearish relative strength index (RSI) divergence is a slightly worrying sign for the bulls and could yield a drop to $7,700-$7,600 range.

However, such a decline would likely be short-lived, as the 5- and 10-day MAs are biased to the bulls (trending north). While, last Thursday’s over $1,000 rally confirmed a double bottom bullish reversal and falling wedge breakout (bullish pattern).

Furthermore, the weekly chart below indicates that bitcoin has established the ascending 50-MA as a strong support, meaning that only a close below that line would revive the bearish view.

Weekly chart

Resistance Ahead: Bitcoin Bulls Seek Move Above $8,500 - CoinDesk

Many traders/analysts are of the opinion that only a move above $11,700 would signal a long-term bull market reversal.

While that may be true, a convincing move above $8,500 (falling trendline hurdle as seen in the daily chart) could be considered as an advance indicator of an impending break above $11,700. That’s because the breach of the trendline hurdle would signal the end of the downtrend from bitcoin’s December all-time high of around $20,000.

View

  • A high volume break above $8,500 (falling trendline hurdle would confirm a long-term bearish-to-bullish trend change.
  • A healthy pullback to $7,700-$7,600 could be seen, but will likely be short-lived.
  • A daily close (as per UTC) below the 10-day MA would abort short-term bullish view.
  • Only a break below the weekly 50-MA (currently seen at $6,9510) would revive the bearish outlook.

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