As long as the digital currency remains above the $10,000 psychological support, downside risks are limited
Bitcoin price volatility looks subdued these days, with the leading cryptocurrency by market capitalization being stuck in the range below the $11,000 psychological level. The coin saw a short-lived rally along with global stock markets at the start of the week but failed to preserve upside momentum and switched into a corrective mode on Tuesday.
Of note, despite a broad-based sell-off in gold and the S&P 500 index seen last week, bitcoin managed to recoup some losses and looked relatively resilient. Furthermore, the price refrained from a deeper retreat and stayed above the $10,000 crucial support. As long as the digital currency remains above this psychological support, downside risks are limited.
Despite the coin was rejected from the $11,000 barrier yesterday, it looks like the prices will resume the ascent that will lead to a major breakout eventually. However, the prices could stay under pressure in the short term and even challenge the 100-daily moving average around $10,500.
As of writing, bitcoin was changing hands marginally below the $10,800 area. Earlier in the day, BTCUSD briefly derailed the 20-daily moving average and bounced quickly, suggesting the bearish potential is limited at this stage, with the overall short-term trend remaining bullish.
At the same time, the continued gains above the $10,500 figure are necessary to trigger another bullish attempt in the near term. In other words, the cryptocurrency number one needs to clear the $11,000 handle in order to retarget 2020 highs after a break above the $11,200 strong resistance last seen on September 19.
On the daily charts, once above the $11,000 area, the BTCUSD pair could retarget the $11,700 and possibly the $12,000 figures. If bitcoin fails to keep the recent bullish momentum intact, the immediate support should be expected in the $10,600-$10,500 region. According to the daily RSI, bitcoin will likely retain its bearish bias in the immediate term.