Bitcoin clears key moving averages as buyers look to hold gains

Another upward push is underway from bitcoin buyers today. After drawing support near $82,923, just above a key swing region, the price has moved through both the 100-hour and 200-hour moving averages.

For the buyers, the technical picture has improved. Clearing those averages is only the first step, though. Holding them and building on the move is what counts next.

The swing area was the base for the move.

Bitcoin spent roughly the past week climbing beyond a large swing region bounded by $81,517 and $82,833. The push through that zone helped fuel a climb toward highs near $87,334, a level reached on Monday and again last Wednesday.

From there, an extension looked possible, but the buying momentum faded. The market turned down and revisited the top portion of the prior swing zone.

Around $82,500 was Monday's low, which drew the market back into the zone. Sellers, however, could not push a deeper drop. The rebound that came next met the 200-hour moving average and stalled there, so upside stayed contained before today's renewed attempt.

This session saw fresh bids around $82,923, a level slightly above the $82,833 ceiling. The level held as buyers stepped in, and the resulting turn upward carried the market beyond both hourly averages.

The current position of the hourly moving averages now determines the risk.

During the current session, bitcoin has climbed through the following markers:

• $83,855 represents the 100-hour moving average.

• $84,316 marks the 200-hour moving average.

For buyers aiming at more upside, those levels are the immediate risk.

If a retreat starts, support at $84,316, the 200-hour moving average, is what gets tested first. A hold above it leaves buyers with the healthier technical setup. Losing it would sap the breakout and redirect focus to $83,855, where the 100-hour moving average sits.

Should the market trade beneath both averages and stay underneath, the mood around the move would sour. It would mean resistance was broken but not defended. From there, the $82,833 swing area would again become relevant, then Monday's low near $82,500 and the zone's lower boundary at $81,517.

At this stage, the bulls are back on top of the hourly averages. The challenge is to protect that ground.

Which upside targets come next?

Having cleared the averages, the price can aim next at $86,117. Further up, last week's peak around $87,334 comes into view.

That level represents a real challenge, since it stopped the advance on two occasions during the prior week. Getting through it and staying there would demonstrate real movement past the previous top.

Further out, the region around $90,554 — where swing highs formed on January 23 and January 27 — is the next objective.

After that, $92,000 takes over as the next reference point. That area sits at the intersection of round-number resistance and the 50% midpoint of the drop from the record high posted in October of last year. With two technical points near the same price, the area stands out as a possible battleground between buyers and sellers.

Crucial technical reference points

Upside objectives

• $86,117 — the nearest upside objective.

• $87,334 — last week's high and a major barrier to a breakout.

• $90,554 — the swing-high zone from January 23 and January 27.

• Around $92,000 — a 50% retracement as well as round-number resistance.

Downside support and risk to the bullish case

• $84,316 — the 200-hour moving average, serving as first support on a pullback.

• $83,855 — the 100-hour moving average, the lower edge of the immediate risk zone.

• $82,833 — the upper limit of the key swing area.

• $82,500 — Monday's corrective low.

• $81,517 — the lower limit of the key swing area.

Beginners' lesson: let the breakout determine the risk

Traders can use a climb through a moving average to measure whether a move has real staying power. Before today's rally, the 200-hour moving average had been holding gains in check. With the price above it now, buyers want that former resistance to act as support. If a pullback holds above the average and price turns up again, the bullish case gains support.

If price falls back through both hourly averages and stays there, the picture changes. The breakout loses momentum, and buyers are left with less technical support for their position.

That is the value of using technical levels to define risk. Rather than simply hoping the market keeps climbing, traders can see what must hold and what would invalidate their view.

Buyers are making their play. Hold above the 100-hour and 200-hour moving averages, and the technical setup remains in place to aim at the next targets. Slip back below both, and today's breakout loses its force.