Bull Breather? Bitcoin Market Turns Indecisive at Two-Month High

Bull Breather? Bitcoin Market Turns Indecisive at Two-Month High 1

The bitcoin market is telling a tale of bullish exhaustion with indecisive price action following a rise to the highest point since November.

The top cryptocurrency witnessed two-way business on Wednesday. Prices rose from lows near $8,550 seen during the Asian trading hours to a two-month high of $8,903, only to end the day (UTC) on a flat note at $8,808, according to CoinDesk’s Bitcoin Price Index.

Essentially, bitcoin created a “doji” candle, which is widely considered a sign of indecision in the marketplace.

In this case, however, the candle could be considered a sign of buyer exhaustion, as it has appeared following a sharp rally from $6,850 to $8,900 and suggests the indecision is predominantly among the bulls.

The price action seen so far today is telling the same story. The cryptocurrency fell from $8,800 to $8,575 during the Asian trading hours and has struggled to chart a strong bounce ever since. This is in contrast to the quick reversals from sub-$8,600 levels seen in the previous two days.

At press time, bitcoin is trading near $8,600, representing a 1 percent drop on a 24-hour basis.

Bitcoin now risks a deeper pullback below Wednesday’s low of $8,555. A drop through that support would validate buyer exhaustion signaled by the doji candle (above left), attracting selling pressure.

It would also confirm a double-top breakdown on the hourly chart (above right). That would open the doors for $8,210 (target as per the measured move method).

That said, the short-term outlook would turn bearish only if any pullback ends up violating the bullish higher low of $7,667 created Jan. 10.

That, however, looks unlikely with the 5- and 10-day averages continuing to trend north. These averages, currently located at $8,508 and $8,276, respectively, tend to reverse pullbacks when they are on an upward trajectory. Further, the longer duration charts have recently turned bullish.

Wednesday’s high of $8,903 will likely come into play if prices violate the lower high of $8,705 seen on the hourly chart in the next few hours.

A break above $8,900, a level that has acted as strong resistance in the last 48 hours, would likely invite stronger buying pressure, yielding a quick move to the 200-day average at $9,100.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin38,294 0.12 % 2.27 % 9.68 %
Ethereum2,624.1 0.11 % 6.23 % 17.13 %
Tether0.9997 0.39 % 0.56 % 0.04 %
Binance Coin392.81 0.25 % 4.25 % 16.73 %
USD Coin1.000 0.30 % 0.43 % 0.11 %
Cardano1.110 0.76 % 4.86 % 24.71 %
Solana99.32 0.10 % 3.38 % 29.87 %
XRP0.6358 0.58 % 3.58 % 15.52 %
Terra64.12 0.47 % 2.72 % 20.36 %
Polkadot19.15 0.57 % 1.43 % 23.76 %

Bitcoin (BTC) $ 38,351.00
Ethereum (ETH) $ 2,623.86
Tether (USDT) $ 1.00
Binance Coin (BNB) $ 393.69
USD Coin (USDC) $ 1.00
Cardano (ADA) $ 1.12
Solana (SOL) $ 99.90
XRP (XRP) $ 0.637695
Terra (LUNA) $ 64.57
Polkadot (DOT) $ 19.26