Bitcoin is trading marginally higher on Friday, trying to shift into a recovery mode following two days of steep losses. After consolidation below the 50-DMA, BTCUSD turned lower as the bulls were deterred by this strong resistance than now arrives around $9,400. The sell-off took the prices to lows marginally above the $9,000 handle that acted as support and triggered a bounce on Friday. However, the recovery momentum looks too modest to bet on more sustainable gains in the near term, with downside momentum persisting.
The fact that the leading cryptocurrency by market capitalization failed to challenge the mentioned moving average on several occasions could be interpreted as a bearish technical signal suggesting the coin may resume the decline after a recovery to more attractive levels. Only a decisive break above the $9,400 area will improve the short-term technical picture for bitcoin.
From a wider perspective, the 50-weekly moving average around $9,000 acts as strong support. As long as the prices stay above this handle, bearish risks are limited. Once below, BTCUSD could retarget the $8,800 level. Continued bearish attempts at $9,000 could weaken this level that may give up eventually.
However, in this scenario, the digital currency may turn the $8,800 region into resistance and extend losses to the $8,200 area where an attractive buy zone is located. If so, the intermediate support is expected at $8,500.
Many market participants are citing the recent hacking of top Twitter accounts including Elon Musk’s as a reason behind the sell-off in bitcoin. But the cryptocurrency was already under some pressure before, and it was just a matter of time when the breakdown was to take place.
In the immediate term, BTCUSD needs to overcome the $9,200 area in order to extend the recovery and see a more sustainable upside momentum. The longer the prices stay below the 50-daily moving average, the higher is the risk of retreating below $9,000 for the first time since early last week.
