Bitcoin has formed lots of highs and lows on its hourly chart, and it is trading in an ascending channel, it has also bounced off its support. The application of the Fib extension tool indicates the next possible resistance levels of the digital currency.
The Extension Lines of Bitcoin
The 50 percent extension line is close to the $9,600 levels then the 38 percent extension is at $9462. The 76 percent extension is at $9,927 or swing highs then the complete extension is above the channel resistance at $10,174. The longer-term 200 SMA is moving above the 100 SMA to indicate that the least resistance path is to the downside.
In other words, the selloff could still continue from here. Also, these moving averages tend to be holding as dynamic inflection points. Stochastic is also declining from the overbought region to indicate a return in purchasing pressure. This could result in a test of the swing low, and a further decrease could trigger a downward trend.
Relative Strength Index
Relative strength index has some space to increase so some bullish momentum might be left, but the oscillator is also moving towards the levels of overbought and it could draw sellers back in. Bitcoin is struggling to maintain its value over the $9,000 mark, but it seems like bulls are intense on maintaining this level.
Bitcoin needs a stronger bullish pressure to get past the resistance at $10k and maintain the longer-term climb. So far, there have been a lot of positive updates, safe for remarks form Warren Buffet and Bill Gates on the value of bitcoin. There is a report that ICE (the parent company of NYSE) wants to develop a bitcoin exchange platform that could increase trading activity and as well as the liquidity of the digital currency. This also indicates that big financial institutions are recognizing the legitimacy of bitcoin.