Bitcoin Falls Back After Briefly Breaking $9k Resistance

A significant move back above $9,000 could trigger liquidations and a possible short squeeze across the market.

Based on CoinDesk's Bitcoin Price Index, the top cryptocurrency by market cap moved from just under $8,700 at 01:00 UTC to $9,009 around 10:00 UTC - the third attempt to break through this morning.

"Such an increase would also see the price challenge the current 200-day moving average, a strong indication that bitcoin is entering into bullish territory."

Bitcoin dominance - the coin's share of the total cryptocurrency market - has dropped from nearly 2 percent since last Friday.

Bitcoin currently makes up approximately 66 percent of the total market, according to CoinMarketCap.

Declining dominance suggests traders are placing proportionally less value into bitcoin, attracted to the possibility of making better returns from bets outside of the original cryptocurrency.

Should the bulls be able to push bitcoin firmly back above the $9,000 threshold, the market may face a short squeeze - a sharp rise in a particular asset's price following a series of mass liquidations.

In the space of a few days at the beginning of April last year, bitcoin increased by more than $1,000 after finally moving past the long-fought-over $4,200 resistance line.

Helped along by the hype surrounding Facebook's Libra coin, the April move triggered a bull run that ultimately took bitcoin up to $13,000 by the end of June 2018.

Disclosure: The author holds positions in bitcoin, binance coin and ethereum, as well as other crypto assets.