- Bitcoin’s early-January rally met resistance at key Fibonacci level.
- BTC continues to trade 100-day moving average on Saturday.
- $8000 is a critical support level in near-term.
Bitcoin (BTC/USD) started the new year on a strong note and advanced to its highest level since mid-November at $8465 on January 8th. Heightened geopolitical tensions in the Middle East with the US’ killing of a top Iranian general and Iran retaliating by targeting US military bases in Iraq during that time period cause analysts to assess if Bitcoin was being treated as a safe-haven asset.
Following the rally that helped it add around $1500 in less than a week, Bitcoin staged a deep correction and slumped to $7750 on Thursday. However, Bitcoin gained traction, once again, on Friday and rose 5% to close at $8200. With the cryptocurrency market turning subdued over the weekend, Bitcoin seems to have gone into a consolidation phase and was last seen trading at $8115, down 1% on the day.
Technical outlook
The early-January rally seems to have met resistance at the $8400-8500 area, where the Fibonacci 50% retracement of October 26 – December 17 drop is located. With a daily close above that level, Bitcoin could target $8900-9000 area (Fibonacci 61.8% retracement of October 26 – December 17 drop/psychological level). In the meantime, the Relative Strength Index (RSI) on the daily chart continues to stay above 60 despite the correction, suggesting that the pair has more space on the upside before turning overbought.
On the other hand, a critical technical support seems to have formed near the $8000 mark (Fibonacci 50% retracement of October 26 – December 17 drop/100-day moving average). As long as buyers are able to keep the price above that level, the bullish momentum could remain intact. Below that level, $7650 (January 10 low) and $7450 (20-day moving average) could act as interim support levels.
Bitcoin daily chart
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