Bitcoin backed down after reaching initial resistance at $32,000. Short-term momentum is getting better, which could maintain buyers active above the $30,000 support level as bullish sentiment returns.
Buyers have always taken benefits along the intermediate-term downtrend described by a series of lower price highs on the plots. There is a very strong and powerful resistance at around $32,000-$34,000. Which might limit upside price moves. Bitcoin was trading at around $31,700 at the time. And also it is roughly flat over the past week.
- The relative strength index (RSI) on the four-hour chart is reaching overbought zone. Which this could cheer further selling over the short-term.
- The daily RSI is growing from oversold levels since Tuesday. In addition to it shows a bullish divergence. Higher lows on the daily RSI offers that the intermediate-term downtrend is slowing.
- Bitcoin stays in a narrow range between $30,000 and $36,000 as the broader uptrend gets weaker.
“We are now short-term bullish to the topside against the $30,000 region triple bottom,” a trading firm said this.
Bitcoin looks to have found its footprint after Wednesday’s nearly 10% rise. It is the biggest peofit since July 17. And ao, it might soon compete the upper end of its monthslong trading range of $30,000 to $40,000.
“We are now short-term bullish to the topside against the $30,000 region triple bottom with strong bullish divergence,” Singapore-based QCP Capital mentioned this. “In addition to this, the market is short gamma to the topside – a break above $35,000-$36,000 could trigger a quick short squeeze towards the $40,000-$42,000 range top.”
Bitcoin bears were unsuccessful at least three times in the past two months to set up a foothold under $30,000. As prices closed (UTC) under the key support at beginning of this week. Wednesday’s jump to $32,000 nullified the bearish breakdown.
The persistent protection of the $30,000 sign has taken the shape of a so-called triple bottom sample on the daily plot. Which also displays a bullish divergence of the relative strength index (RSI). The pattern happens when the indicator prints higher lows. Denying weakness in price. And also it is a signal of seller boredom the extend area for a price bounce.
The 50-day simple moving average at $34,500 might present instant resistance. Based on what Katie Stockton said. He is the founder and managing partner of Fairlead Strategies. His idea was that a breakout above the 50-day SMA would target the 200-day SMA near $44,000.
Patrick Heusser that is the head of trading at Crypto Finance also mentioned to $35,000 as a critical level. “Order book flow looks good, but a lot of stale selling orders are coming up in the $35,000 area, which still need to be cleared,” Heusser said.
Finlay, market participants who went “short gamma” by selling call options, or insurance against bullish moves , at or above $35,000 over the past few weeks may resort to hedging, that is buying spot or futures, if prices rise to above $35,000.
That, in turn, may bolster the bullish move, possibly yielding a test of $40,000-$42,000, as anticipated by QCP Capital. Being short gamma indicates being an option writer (seller) despite of whether the option is a call or put. Traders usually write options when they expect the underlying asset to see low-volatility consolidation.
Bitcoin is currently trading at near $31,800, representing a 1% drop on the day.
The cryptocurrency increased from $29,800 to over $32,000 yesterday on a string of bullish news. The day finished with tech entrepreneur and provocateur Elon Musk saying that his aerospace company, SpaceX, holds bitcoin. Musk also mentioned that he owns Bitcoin, Ethereum and Dogecoin, too. And finally he added that Tesla may relist bitcoin as a payments alternative.