Bitcoin could fail to break the $9,000 resistance level

Bitcoin could fail to break the $9,000 resistance level

Disclaimer: This article contains technical analysis, which is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The content presented in this article is the opinion of the author. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence and consult with a financial advisor before making any investment decisions.

Bitcoin is trying to break above the $9,000 resistance level, but several technical patterns estimate that it is bound for a retracement. The following technical analysis evaluates where the flagship cryptocurrency could be heading next.

Bitcoin technical analysis

In the past 24 hours, Bitcoin surged nearly 5 percent after bouncing off the $8,600 support level. The upswing allowed it to move close to the $9,000 resistance level. This is BTC’s first attempt to break above this price hurdle.

Despite recent bullish impulse, the TD sequential indicator is presenting a sell signal on BTC’s 1-hour chart. This technical index estimates that the pioneer cryptocurrency could undergo a one to four candlesticks retracement or begin a new downward countdown. A red two candlestick trading below a preceding red one candle could confirm the bearish outlook.

Bitcoin US dollar price chart
BTC/USD by TradingView

Additionally, a bearish divergence is forming on BTC’s 4-hour chart. This technical pattern develops when the price of an asset appears to be reaching higher highs while the Relative Strength Index (RSI) is making lower lows. Although this bearish formation does not provide a precise selling point, it is a sign that the uptrend could soon reach an exhaustion point.

Bitcoin US dollar price chart
BTC/USD by TradingView

If Bitcoin is indeed bound for a correction, a spike in the selling pressure behind it could push its price down to the 78.6 percent Fibonacci retracement level at $8,550. Closing below this significant level of support would increase the probabilities for a steeper decline to the 61.8 or 50 percent Fibonacci retracement levels. These areas of support sit around $8,260 and $7,950, respectively.

Bitcoin US dollar price chart
BTC/USD by TradingView

It is worth noting that an increase in demand for Bitcoin around the current price levels could jeopardize the bearish outlook. If the pioneer cryptocurrency is able to close above $8,990 with enough volume, it would likely try to test the 113 or 127.2 percent Fibonacci retracement levels. These levels of resistance sit at $9,257 and $9,550, respectively.

Overall sentiment

In a recent Twitter poll conducted by crypto-focused economist Alex Krüger, over 75 percent of the 4,079 participants claimed that BTC will move above $14,000 this year. The overwhelming bullish sentiment amongst investors can be interpreted as a negative sign. The wisdom of the crowd is rarely correct, especially in the cryptocurrency market. Therefore, Bitcoin could be about to go through a steep correction that disappoints even the most optimistic investors.

Bitcoin | BTC

Updated: Jan 17 at 10:44 am UTC
$8,907.63
3.03%

Bitcoin, currently ranked #1 by market cap, is up 3.03% over the past 24 hours. BTC has a market cap of $161.81B with a 24 hour volume of $34.32B.

Chart by CryptoCompare

Bitcoin is up 3.03% over the past 24 hours.

Posted In: Price Watch, Technical Analysis
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Ali Martinez
Author

Ali Martinez

Technical Analyst @ CryptoSlate

After Ali began forex trading in 2012 In 2014, he came across Bitcoin’s whitepaper and was so fascinated by the idea of a decentralized, borderless, and censorship-resistant currency that he started buying Bitcoin. By 2015, he started traveling to spread the word about Bitcoin.

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Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.