Bitcoin Back Above $10K But Gains Could Be Short-Lived

Bitcoin is back above $10,000, but the gains could be short-lived, the price charts indicate.

Having breached key support yesterday, prices on CoinDesk's Bitcoin Price Index (BPI) fell to a two-week low of $9,627.89 at 01:14 UTC today. In the last few hours, bitcoin BTC$74.902,67 has managed to regain some poise and moved back above $10,000. At time of writing, bitcoin was around the $10,300 mark.

The 15 percent drop from the weekend high of $11,942.25 signals a continuation of the series of lower highs on the price chart, suggesting the bears remain in control.

That said, the quick rebound from $9,627.89 to $10,000 adds credence to the argument that the cryptocurrency could be forming a base around $10,000.

However, the 4.9 percent rally from the intraday low of $9,627 looks like a technical correction amid a bigger downtrend. Further, a break below $9,780 could result in sharp losses.

Bitcoin chart

The above chart (prices as per Coinbase) shows:

• BTC closed (as per UTC) yesterday below $10,313 (50 percent Fibonacci retracement of 2017 low-high), signaling another victory for the bears. However, they have failed at least four times in the last two weeks to keep the prices below the key Fibonacci level, thus establishing it as an important support level.
• A falling channel marked by falling trendlines representing lower highs and lower lows.
• Five-day moving average (MA) and 10-day MA are trending lower, indicating a bearish setup.
• The 50-day MA has adopted bearish bias (is beginning to slope downwards).

Also, the bearish move below $10,313 witnessed yesterday looks strong.

4-hour chart

So, the cryptocurrency looks set to test $8,052 (61.8 percent Fibonacci retracement of 2017 low - high) over the next few days.

However, the above scenario may not come to fruition if the rising trendline continues to cap downside in bitcoin.

Trendline chart

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• The previous day's close below $10,313 (50 percent Fibonacci retracement of 2017 low-high) has strengthened the bears.
• However, the rebound from the trendline support seen today calls for caution.
• A daily close (as per UTC) below the trendline support of $9,780 could yield a drop to $8,052 (61.8 percent Fibonacci retracement of 2017 low to high).
• Bullish scenario: A daily close (as per UTC) above $11,690 would turn the tables in favor of the bulls.

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