Bitcoin prices rallied to nearly two-month highs marginally below the $9,500 area earlier on Thursday but failed to confirm a breakout and quickly dipped below the $9,000 figure that turned into resistance again. Now, the technical picture on the intraday charts is looking neutral, with downside risks persisting as long as the prices remain below the mentioned psychological level.
The recent pick up in volatility triggered a sharp rise in trading volumes at major exchanges. Against the backdrop of abrupt moves in the market these days, the largest cryptocurrency may continue to show aggressive moves in both directions, suggesting traders should be cautious when making trading decisions.
After some consolidation below the $8,000 barrier, the digital currency attracted demand on Wednesday and staged a strong rally but still failed to challenge $9,000. In the near term, the token needs to attract buyers so that to get back above this level and confirm a breakout on a daily closing basis. Otherwise, the selling pressure may reemerge and drive the prices lower before the bulls reenter the game at more attractive levels.
In this scenario, BTCUSD could revisit the $7,970 region where the 100- and 200-daily moving averages converge. Now, there is a chance for a break above $9,000 but the cryptocurrency will need the additional impetus to do this. Otherwise, the recent bullish move will be assessed as a false breakout that could lead to further losses.
If the retreat continues, the BTCUSD pair will first target the $8,500 area that could cap the downside pressure. Once below this level, the sellers may bring the cryptocurrency back to the above-mentioned region where the key moving averages converge.
On the upside, bitcoin needs to turn positive on the daily timeframes first so that to challenge the key $,9000 resistance. A daily close above this figure will signal the rising possibility of a bullish extension towards $10,000. Should the digital currency overcome this psychological figure, the $10,500 stiff resistance will come into market focus.
