Bitcoin Continues to Recover now above $9500
The bitcoin market, BTC/USD, has been on a bit of a recovery as the digital currency is now back to trading above $9,500. Traders are now eying the critical and psychological technical resistance barrier at $10,000. Right now, price action has moved higher and is challenging the upside barrier of the descending channel. This resistance level is supported by the 100 day moving average.
The 100 day moving average is below the 200 day moving average. This indicates some more weakness in this market. So, traders should be cautious as the bears could reenter the market moving the price of bitcoin lower again. There is a formidable upside barrier at $10,000 which could hold, thus capping this recovery and sending this market into consolidation mode. Please refer to the below daily chart.
Looking at today’s stochastic indicators, they are moving lower indicating bullish pressure. The relative strength index (RSI) is moving side to side but is near the overbought levels. This is another indication that buyers are being cautious at this level. Bitcoin could move lower to the trend channel support or even the swing low.
Looking at the economic calendar, the U.S. consumer price index (CPI) came in stronger than expected overnight. This will support the U.S. dollar and weigh on riskier asset classes like bitcoin. The Federal Reserve is likely to tighten to combat inflation putting a dent on business investment and consumer spending.
There is some good news for bitcoin and other cryptocurrencies as there are waning fears over new regulations. Along with a lack of headlines regarding regulations, the United States Senate is monitoring what they feel are encouraging developments in cryptocurrencies. Other countries are expected to follow the U.S., possibly bringing buyers back into the market.