Bitcoin staged a strong rally as it popped up to a high of $9,500 before showing signs of a pullback. Applying the Fibonacci retracement tool shows where buyers might be waiting.
The 61.8% retracement level lines up with the rising trend line connecting the lows since mid-March. This is also in line with a short-term area of interest and the 100 SMA dynamic support, which is above the 200 SMA to confirm that the path of least resistance is to the upside.
In other words, the uptrend is more likely to resume than to reverse, and support areas are likely to hold. The gap between the moving averages is widening to reflect stronger bullish momentum. With that, a shallow pullback to the 38.2% Fib at $8,400 or the 50% level at $8,100 might be enough to draw bullish momentum back in. If any of the Fibs hold, bitcoin could resume the climb to the swing high or higher.
Volume is elevated to reflect strong market interest that could carry on and sustain the uptrend. Stochastic is turning lower after reaching the overbought zone, though, so a return in bearish pressure might be observed in the meantime. ADX is still above 50 to confirm that the trend could keep gaining traction.
Bitcoin popped higher as more bulls joined in on expectations of a long-term rally on account of the halving of mining rewards. Based on previous instances, this has the potential to result to twice as much value of the coin in a few months or years.
Apart from that, risk-taking has been observed in financial markets as traders are hopeful that more economies could reopen and resume close-to-normal operations, thereby lifting business and consumer activity. Bitcoin is also taking advantage of dollar weakness, which has been spurred by weak employment data and downbeat growth figures.
Images courtesy of TradingView
Source: https://bitcoinerx.com/price-analysis/bitcoin-price-analysis-btc-usd-major-bullish-pullback/
