Bitcoin has swung both ways in the last ten hours.
The digital currency rose above $10,400 in early Europe, but lacked strength to cut through Wednesday’s high of $10,500 and fell back to $10,050.
The decline was quickly reversed in early US session, but again, the $10,500 handle capped upside. As of writing, bitcoin is priced at $10,230 on Bitstamp.
Bitcoin produced a big bearish gravestone Doji candle after US desks failed to push the price above $10,500.
A gravestone doji is sign of “sell on the rise” mentality and suggests scope for a protracted moved to the downside.
Sellers are likely to challenge the support of the 10DMA at $9,900. A close lower would abort the immediate bullish setup and could be followed by consolidation or a deeper drop to $9,500.
On the flip side, if the buyers absorb the selling pressure around the 10DMA, a fresh move higher toward $10,500 could be seen.
From the trading perspective, now is the right time to use trail stop loss on profit making long positions. If prices drop below $10,000, traders should reduce long exposure.
Meanwhile, a bounce from the 10DMA or a break above $10,500 would be a good time to boost the long exposure.