Bitcoin’s $780 Price Recovery Makes Friday’s Close Pivotal

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  • Bitcoin created a bullish hammer candle yesterday, making today’s UTC close pivotal. A close above $10,380 (candle’s high) will likely invite stronger buying pressure and yield a rise toward $11,000.
  • A high-volume move above $10,822 would confirm a triangle breakout on the daily chart and signal a resumption of the rally from $4,000.
  • Prices may fall back to Thursday’s low of $9,600 if the cryptocurrency fails to hold above $10,000 in the next 24 hours.

Bitcoin’s $780 recovery from an 18-day low has neutralized the bearish setup, but a strong follow-through is now needed to put the bulls back in charge.

The leading cryptocurrency by market value picked up a bid around $9,600 – the lowest level since Sept. 1 – in the Asian trading hours on Thursday and rose to a high of $10,380 on Bitstamp in the U.S. trading hours.

That quick recovery saved the day for the bulls, as the cryptocurrency was looking weak below key support at $9,855, as discussed yesterday.

Notably, the price bounce from $9,600 to $10,380 has taken the shape of a candlestick pattern named “bullish hammer”, as seen in the chart below.

Daily chart

A bullish hammer comprises a long lower shadow, a small body and little or no upper shadow. It occurs when an asset erases a big early drop to end the day on a positive note at or near the day’s high.

On Thursday, BTC fell to $9,600 only to rise all the way back to $10,380 before printing a UTC close at $10,271 – up 1.18 percent on the day.

A hammer is widely considered an early warning of an impending rally. However, traders usually wait for a strong follow-through – preferably a UTC close above the hammer candle’s high – before hitting the market with fresh bids.

The focus, therefore, is on today’s UTC close. Acceptance above the hammer candle’s high of $10,380 will likely invite stronger buying pressure and yield a rise to $11,000.

As of writing, BTC is changing hands at $10,140 on Bitstamp, having clocked a…

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