Bitcoin Selloff Stalls at Historical Price Support Near $10K

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  • Bitcoin’s defense of the 100-day moving average and a bullish divergence of an hourly chart indicator suggest scope for a minor price bounce to $10,300
  • Bitcoin will remain in the hunt for a drop to $9,467 (Aug. 13 low), as long as the rising wedge breakdown seen on the 4-hour chart remains valid.
  • A UTC close above $10,956 would shift risk in favor of a rally to $11,850-$12,000. A weekly close above $12,000 is needed to confirm bullish revival.

Bitcoin (BTC) sellers are again struggling to force a sustained break below a widely-followed support level, but the outlook would turn bullish only above $10,956.

The premier cryptocurrency by market value fell by $600 in the Asian trading hours on Wednesday, confirming a rising wedge breakdown on the intraday charts.

The bearish reversal pattern opened the doors for a retest of the Aug. 15 low of $9,467, as discussed yesterday. So far, however, that target has remained elusive and the dips below the 100-day moving average (MA), currently at $9,900, have been short-lived.

It’s worth noting that the long-term MA worked as strong support earlier this month. The cryptocurrency ran into bids below the 100-day MA on Aug. 15 and closed (UTC) that day with gains above $10,300. The average was again defended on the following day and the subsequent price bounce ended up hitting highs above $10,950 on Aug. 20.

So, if the 100-day MA continues to hold ground over the next few hours, chart-driven buying could lead to a price bounce.

As of writing, BTC is changing hands at $9,970 on Bitstamp, representing a 1.7-percent loss on the day.

Daily and hourly charts

The lower wick attached to today’s candle (above left) represents a failure on the part of the bears to keep the cryptocurrency below the 100-day MA. The average also proved a tough nut to crack on Wednesday.

The repeated defense of the key MA, coupled with the bullish divergence (higher lows) of the hourly chart relative strength index (above right)…

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