Bitcoin rally subsides as price dwindles to $9,000

Bitcoin is testing the $9,000 level of support after falling significantly since last weekend's 40% move to the upside

Bitcoin is now 12% down from Saturday’s peak of $10,350 as momentum and volume have both dropped off significantly.

At the time of writing, Bitcoin is trading at $9,072, which is in confluence with the 100 exponential moving average (EMA) on the daily chart.

The next technical level of support for Bitcoin is currently residing at $8,850 around the daily 50 EMA. This level could be retested before a continuation to the upside, although volume would need to return from buyers.

However, if Bitcoin can hold above $9,000, it would almost certainly signal a bullish phase in the market, with upside targets expected at $9,350, $10,000, and $10,350.

Bitcoin bulls will need to maintain the rally to negate a potential exponential moving average death cross, which would come to fruition if the 50 EMA crosses the 200 EMA to the downside on the daily chart.

A death cross has only happened twice on Bitcoin’s daily chart since 2014, resulting in 60% and 72% corrections to the downside respectively.

But for that to come into play, Bitcoin needs to trade below the 200 EMA at $8,650 for a prolonged period of time, making it a crucial pivot point over the coming weeks.

From a short-term perspective, Bitcoin bounced twice from $9,080 in July, rising to $11,145 and $12,350 respectively in the following days.

This demonstrates why there is a plethora of bullish sentiment surrounding Bitcoin at the moment, as a tremendous rally to the upside could well be on the cards in the coming days.

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