BTC/USD rallied during the weekend, opening the week with a positive gap. The move higher continued during the early trading Monday, with the crypto surpassing the 9000 barrier. Bitcoin continues to trade above the upside support line drawn from the low of March 25th, as well as above a shorter-term and steeper one, taken from the low of April 29th. What’s more, it is trading well above all three of our moving averages on the 4-hour chart and thus, we will maintain our positive view for now.
The move above 9000 confirmed a forthcoming higher high on the daily chart, while now, the price appears ready to hit the 9370 level, defined by the highs of May 9th and 10th, 2018. If the bulls are strong enough to push through that barrier, then we may see them aiming for the highs of April 25th and May 5th, 2018, at around 9750, or even the psychological round number of 10000.
Taking a look at our short-term momentum studies, we see that the RSI moved well above its 70 line, but has now flattened, while the MACD, although above both its zero and trigger lines, shows signs of slowing down as well. These indicators suggest that a minor setback may occur before the bulls decide to take the reins again, perhaps for the price to test the 9000 level as a support this time. Even if the retreat continues below 9000 and 8900, the bulls could still take the driver’s seat from near the upside support line drawn from the low of April 29th.
In order to start examining the case of a larger downside correction, we would like to see a decisive dip below 8000. Such a move would drive the crypto below the aforementioned line and may initially aim for the 7500 key support area. Another break, below 7500, could extend the slide towards the other, longer-term upside line, which is taken from the low of March 25th.
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