Having rallied more than 50 percent this month, bitcoin is now witnessing a pullback.

The cryptocurrency rose to $9,767 on Bitfinex earlier today – the highest level since March 12 – before falling back to $9,100. As of writing, bitcoin (BTC) is changing hands at $9,125.

The 6.8 percent drop from the intraday highs signals bullish exhaustion near the gradually ascending (bullish biased) 200-day moving average (MA) at $9,835. Furthermore, the 4-hour chart below shows scope for a deeper pullback ahead.

4-hour chart

The indicated bearish engulfing candle (price action engulfed previous 4-hour candle’s high/low) also suggests bullish exhaustion.

Meanwhile, the relative strength index (RSI) index has dipped below the double top neckline support, signaling that BTC will likely find acceptance below the ascending trendline support and drop toward the 50-day MA, currently located at $8,654.

Note, the 50-day, 100-day and 200-day MAs are sloping upwards and aligned one below the other in favor of the bulls. So, a drop below $8,650 will likely be short-lived.

Only a close (as per UTC) below the ascending 10-day MA would signal short-term bullish invalidation.

Daily chart

The above chart shows the 5-day MA and 10-day MA are trending north, also indicating a short-term bullish setup.

Bitcoin witnessed a convincing break above the long-term descending trendline on April 20 and is currently trading well above the trendline support. So, the long-run outlook as indicated by a number of factors remains bullish.

View

Bitcoin remains on the hunt for a bullish break above the $10,000 mark.

There is a risk of a pullback to $8,650–$8,600 in the short-term.

Only a close below the ascending 10-day MA at $8,671 would abort the short-term bullish view.

Pause button image via Shutterstock