Fibonacci Retracement: Last day the price of the digital asset reclaimed the $8,000 mark as the bulls appears to be setting their sights on the second time after the weekly high. The price of the Bitcoin was at the level $8,473 last week. Last week saw the price of the digital asset soar up to the $8,473 mark and according to crypto-media, this rise in the price was due to the fear of war breaking out between the United States and Iran. After the analyst and crypto trader made their prediction, the price of the digital asset pulled backed mainly because the United States President Donald Trump declined to further escalate the situation. As the price of Bitcoin began falling down the crypto-media suggested that the price of Bitcoin going above the threshold of $8.4K was due to the calming down of the Iran-US conflict.
Today’s move above the price of BTC going up and claiming the $8000 suggest that technical factors, not just geopolitical factors are driving Bitcoin’s price action. After topping out at the $8,473 mark as on Jan 8th, analyst forecast that if Bitcoin failed to hold the 200 day moving average, the price may pull back to the 61% Fibonacci Retracement Level near the $7,500. At present the rally has run out of steam and was showing sign of exhaustion. All these was reflected in the relative strength Index (RSI) as it was overbought and the moving average convergence divergence(MACD) histogram showed reduction in momentum.
In trading circles, the investors and traders discussed the need of Bitcoin to fill the CME gap at $7,680, a phenomenon that has become a common occurrence to the extent that many traders factor the necessity of it to their analysis and trading regime. While the Bitcoin was unable to hold the 200 mark DMA, through the current pullback, it has held above the 50-DMA and today the price of the digital asset bounced right off the 50% Fibonacci Retracement at $7,663, partially the CME gap mentioned earlier.
Traders will note that the RSI sharply took the course backward on the daily time frame and remained in the bullish territory at 63. Also, the colored bars of the MACD histogram have turned from red to pink. And as the bar shortens and reduces in size, which indicates an increase in momentum and the possibility of a bull cross between the MACD and the signal line. Currently the bulls are attempting to push the price of above the 200-DMA mark which was reached earlier today. The price tag was at the level of $8,139. If the buyers are able to push the line above the 200-DMA, then the main trend line of the long term descending channel is likely to again present resistance. The trend line has previously worked as the resistance barrier 4 times since the Cryptocurrency reached its 2019 high at $13,800. It appears that the $8,000 marks will act as a launching pad and in the short term if the bulls can push the price through the 200-DMA and descending channels trend line $8,300, traders will target the $8,600 followed by $9,200 mark which will end in at the $9,500 mark.
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Earlier today a analyst from a major financial news agency pointed out and cautioned that while the current price actions favors bulls with a target of $9,500 to $10,000 there is a possibility that the current resistance is fake out which would culminate with a strong rejection of the 200-DMA descending channel trend line leading Bitcoin price Back to the lower support of the descending channel around $6,400 to $5,800.
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