Bitcoin is witnessing a technical correction following Tuesday’s rise from $8,100 to $8,900.
The digital currency is currently priced above $8,600 on major cryptocurrency exchanges. The pullback was expected, as the rally was looking overstretched on intraday technical charts.
The ongoing pullback could be extended further to support at $8,520, which is the low of the long-tailed hourly candle created during Tuesday’s US session.
An hourly close below $8,520 may bring additional losses toward $8,436 (January 8 high) and a sustained move below $7,870 (November 29 high) would confirm a bearish reversal.
However, the support at $8,436 will likely hold as longer duration technical charts are still biased bullish. The daily MACD is signaling a strengthening of bullish momentum and the weekly chart is showing a falling channel breakout.
So, the pullback is expected to be short lived. Moreover, traders who missed the bus on Tuesday will likely utilize the ongoing correction to board the rally.
As per the daily chart, the cryptocurrency will remain on track to test $9,100 (200-day average) as long as prices are holding above Tuesday’s low of $8,100.