Bitcoin hits $9,400 in vertical rally, but it’s at risk of a violent pullback for this key reason

Yesterday, we saw a strong rise in bitcoin above the $9,000 resistance. We even discussed the chances of more upsides towards $9,500, considering a successful close above the $9,000 level and the 100 hourly simple moving average.

BTC price did continue higher above the $9,200 resistance and a connecting bearish trend line on the hourly chart. Finally, the price tested the $9,400 area. A new 2020 high is formed near $9,426 and the price is currently consolidating gains.

It is testing the 23.6% Fib retracement level of the recent rally from the $8,874 low to $9,426 high. On the upside, an initial resistance is near the $9,400 level.

However, the main resistance is near the $9,500 level, where bitcoin bulls need to be very careful. If there is a strong rejection near $9,500, the price could start a substantial downside correction. The first key support on the downside is near the $9,150 level.

We cannot discard the fact that BTC bears might fail to protect $9,500. In the mentioned case, the price is likely to surge towards the $10,000 handle. Any further upsides could open the doors for a larger upward move towards the $11,200, $11,500 and $12,000 levels in the coming days.

• Major Support Levels – $9,150 followed by $9,000.
• Major Resistance Levels – $9,400, $9,425 and $9,500.