Bitcoin (BTC) remains on the hunt for a notable recovery with prices holding above widely tracked average support.<\/p>\n
The top cryptocurrency is currently trading above $8,760, having defended the 200-day moving average (MA) support at $8,720 early on Wednesday.<\/p>\n
The support level is widely considered a barometer of long-term market trends and tends to attract buying or selling pressure, depending on the direction in which it is breached.<\/p>\n
Therefore, a corrective bounce to levels above $9,000 put forward by a bullish reversal candlestick pattern confirmed Monday may remain elusive if prices find acceptance under the long-term average. <\/p>\n
The key support has held ground so far today, keeping hopes for a recovery rally alive. The average support withstood selling pressure on Tuesday.<\/p>\n
Bitcoin ran into offers during Tuesdays U.S. trading hours as the stock markets dropped with the Federal Reserve's announcement of a 50 basis point rate cut. Prices briefly fell below the 200-day average but the bears failed to secure a daily close under the support level.<\/p>\n
Bitcoin jumped 4.5 percent on Monday, confirming a bullish reversal doji candle and opening the doors for a notable corrective rally.That pattern will remain valid as long as prices are holding above $8,410 (Sundays low).<\/p>\n
That said, the prospects of a quick move to resistance at $9,075 (Feb. 4 low) would weaken if the 200-day average support at $8,720 gives in. That could yield a re-test of $8,410.<\/p>\n
However, a sustained drop below the 200-day MA looks unlikely, as the MACD histogram is registering a higher low below zero for the fourth consecutive day a sign of weakening bearish momentum.<\/p>\n
So bitcoin appears more likely to bounce from the 200-day MA toward resistance at $9,075 (Feb. 4 low). A violation there would expose the next resistance lined up at $9,312 (Feb. 19 low).<\/p>\n
Bitcoin is trapped in a broadening descending channel on the hourly chart. A break above the top end of the channel, currently at $8,820, would confirm a breakout and imply an end of the pullback from Mondays high of $8,980 and a resumption of the rally from Sundays low of $8,410.<\/p>\n
That would strengthen the case for a bounce to levels above $9,000. <\/p>\n
Disclosure: The author holds no cryptocurrency at the time of writing.<\/p>\n
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