Bitcoin’s insane rally yesterday that allowed it to climb nearly $2,000 at its peak has stalled, with the retrace from its daily highs of $9,500 printing a massive wick that has made its daily candle look quite bearish.
Analysts are now noting that a myriad of different technical factors suggest that the cryptocurrency may be poised for a pullback in the near-term.
There are a few key levels that analysts are closely watching, and how the crypto reacts to these levels in the hours and days ahead could be quite telling for just how high its current strength will lead it in the long run.
Bitcoin Flashes Bearish Signs as Analysts Watch for Reaction to Key Resistance
At the time of writing, Bitcoin is trading up marginally at its current price of $8,850, which is around the price level it has been trading at for the past day.
Overnight the crypto was able to significantly extend its recent uptrend when bulls pushed it to highs of $9,500. This is where it faced a dire rejection that ultimately lead it to decline to its current price levels.
Although Bitcoin has yet to post a sustained decline in the time since this rejection occurred, it is important to keep in mind that a failure for BTC to surmount $9,300 in the coming hours could be dire, leading the crypto to retest its support at $8,400.
One popular crypto analyst on Twitter spoke about the bull and bear cases in a recent tweet, explaining that multiple indicators signal that a pullback is imminent, but that BTC is flashing some positive technical signs on lower time frames.
“BTC: Bullish – price bounced hard off $8400 support and could have a run-up to retest $9000s again, looks good on LTF. Bearish – if unable to break $9300 4hr close, this could make a new lower-high, overbought on oscillators, BTC hit key levels & 7 weeks of green, pullback time?”
Analysts Watching S&P 500 Futures for Insight into Near-Term Trend
Although this latest upwards movement has led Bitcoin to significantly outperform the traditional markets, analysts are still noting that a strong correlation remains.
Another analyst mused the possibility that the S&P 500 futures’ price action tonight will set the tone for where BTC goes next, explaining that there are striking similarities between the two asset’s bidding behaviors.
“Well that is one ugly daily candle considering the leg that got us here. Keep eyes on ES, what bitcoin has done is not suddenly independent of the same bidding behavior seen in traditional markets,” he said while referencing the S&P 500’s futures ticker – ES.
How the crypto trades in the several hours following its recent daily candle close will offer significant insights into which direction it may trend in the days ahead.
Featured image from Unplash.