Bitcoin is Extremely Corrective above $8500- Can it Continue Higher?

Bitcoin is extremely corrective above $8500, after a strong bullish daily close. Can Bitcoin continue highers above $10,000 in the coming days? What are the charts and technical indicators are saying? Read more to find further insights into today’s BTC/USD Technical Analysis. 

May 04, 2020, | AtoZ Markets - Bitcoin had a daily close above the $8500 levels last week with an impulsive bullish pressure. As the price gained more than $1000 in a day, the correction may extend more. 

In mid-March, Bitcoin was declined from $8,000 to lows of $3,800. As a result, futures traders got a massive hit, with the almost 50% daily decline forced many investors to exit their positions.

Later on, BTC futures’ open interest has failed to show a strong recovery, which suggests that many traders have started to remain sidelined or have fully exited their position.

Therefore, the current uptrend could be sustainable than those seen in months past. As futures and margin traders are away from the current market, the price may get more excellent stability.
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Bitcoin is Bullish Above $8500 Support Level

Bitcoin moved higher above the $8500 support level with the pre-halving momentum. Therefore, the bullish price action is still substantial compared to the indecision that was formed later.

The price became very corrective as soon as it reaches at $9000 level. As a result, the price started to stall between $9000 to $8500 levels. As the corrective momentum is not stable, the price is likely to continue higher in the coming days.

Bitcoin is Extremely Corrective

Image: Bitcoin 1 Hour Chart

According to the 1-hour chart, price barely makes new higher highs and lower lows. Therefore, as the correction is happening after an impulsive bullish pressure, the bullish pressure may start again.

Additionally, the price has violated the dynamic level of 20 EMA along with the Tenkan Sen and Kijun Sen on the hourly chart indicating an extreme correction. Therefore, the price may require a substantial breakthrough above the $9000 levels in the hourly chart to show further bullish momentum. Besides, the MACD is bearish but approaching the 0.00 level. Therefore, if the MACD histogram moves to the bullish zone, the price may react with a bullish pressure.

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BTC May Test the $8000 Level Before Moving Higher

According to the Daily chart, BTC managed to have a strong bullish daily close above the $8500 level. Moreover, the bullish daily candle is much more durable compared to the last 30 days price action. 

Though, the indecision bar after the bullish daily candle indicates that bears may push the price down before moving higher. As the corrective momentum is still inside the bullish mother bar, bulls may need to wait for a bearish rejection from $8500 or $8000 to join the bullish rally. On the other hand, a strong bearish daily close below the $8000 may create an opportunity for the price to test the $7500 level again.

Image: Bitcoin Daily Chart

Moreover, the price may continue lower towards the dynamic level of 20 EMA as a mean reversion. Therefore, any further bearish rejection from 20 EMA with increase additional bullish possibility in the price. Additionally, the Stochastic Oscillator lines moved down from the overbought 80 levels, which indicates that the price may correct lower.

To conclude, Bitcoin is very corrective above $8500 that may continue lower at $8000 levels. However, as the bullish daily close is very strong, it has a higher possibility to continue higher above $10,000. However, a strong daily close below the $8000 level may alter the current bullish momentum.

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