This move would allow Bitcoin to preserve its uptrend

bitcoin cryptocurrency investing 1 scaled

Bitcoin’s climb above $45,000 marked an important development for the world’s largest digital asset. For once, BTC snapped an 11-week high and also closed above its daily 200-SMA for the first time since 19 May. The daily long-term simple moving average line often functions as a final litmus test, confirming as asset’s uptrend or downtrend.

So is the bear market finally over? Can we return to a bullish narrative for 2021? While it was still premature to answer such questions, the next week is extremely crucial for the king coin- one that could solidify its state in the market. At the time of writing, Bitcoin traded at $45,672, up by 5% over the last 24 hours.

Bitcoin 4-hour chart

Source: BTC/USD, TradingView

Several bearish trendlines were toppled after BTC bounced back from $30K in late-July. The upper sloping trendline which extended from its May ATH was also flipped on 6 August when BTC shot towards $42,000. However,  certain signs suggested that BTC was due for a retracement before climbing towards its next target at $48,000.

While buyers managed to push BTC north, the Relative Strength Index failed to climb above 72 over the past few days. This bearish divergence suggested that buyers could lost strength before the next BTC upcycle.

Moreover, bullish momentum constantly declined on Squeeze Momentum Indicator and the MACD’s signal line looked to cross above the fast-moving line- which usually acts as a sell signal. In case of a pullback, a higher low can be formed anywhere between $44,000-$44,300 while a drop below $42,320 would initiate further drawdown. To negate this thesis, bulls must target a close above $46,500.

Over here, it’s also interesting to note what a few other metrics say about Bitcoin. As per the latest data from hedging contracts, a large number of put options were set between $36K-38K with high 73% – 80% chances for BTC to drop towards the aforementioned range. However, sentiment continued to be favorable in the market as the Fear and Greed Index clocked in at 71. What this meant was that the overall picture for BTC was still bullish, but chances of a near-term decline were high.

Conclusion 

Even though BTC closed above the all important daily 200-SMA, buyers seemed to be running out of steam. A higher low between $44,000-$44,300 would allow BTC to preserve its uptrend before climbing towards $48,000, but traders must be cautious of a close below $42,320-$42,000.

Ronnie Huss

Ronnie Huss

Leave a Reply

Your email address will not be published. Required fields are marked *

Share:

Share on telegram
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Related Posts

bitcoin
Bitcoin (BTC) $ 65,175.46
ethereum
Ethereum (ETH) $ 3,181.56
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 576.53
solana
Solana (SOL) $ 151.01
usd-coin
USDC (USDC) $ 1.00
staked-ether
Lido Staked Ether (STETH) $ 3,180.46
xrp
XRP (XRP) $ 0.528963
dogecoin
Dogecoin (DOGE) $ 0.163892
the-open-network
Toncoin (TON) $ 6.20
cardano
Cardano (ADA) $ 0.507960
shiba-inu
Shiba Inu (SHIB) $ 0.000028
avalanche-2
Avalanche (AVAX) $ 38.18
bitcoin-cash
Bitcoin Cash (BCH) $ 515.03
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 65,245.48
polkadot
Polkadot (DOT) $ 7.21
tron
TRON (TRX) $ 0.111136
chainlink
Chainlink (LINK) $ 14.95
internet-computer
Internet Computer (ICP) $ 15.48
matic-network
Polygon (MATIC) $ 0.736935
near
NEAR Protocol (NEAR) $ 6.33
litecoin
Litecoin (LTC) $ 85.41
uniswap
Uniswap (UNI) $ 7.87
leo-token
LEO Token (LEO) $ 5.75
dai
Dai (DAI) $ 1.00
aptos
Aptos (APT) $ 10.14
ethereum-classic
Ethereum Classic (ETC) $ 28.19
blockstack
Stacks (STX) $ 2.78
mantle
Mantle (MNT) $ 1.22
filecoin
Filecoin (FIL) $ 6.71
first-digital-usd
First Digital USD (FDUSD) $ 1.00
crypto-com-chain
Cronos (CRO) $ 0.131211
render-token
Render (RNDR) $ 9.10
cosmos
Cosmos Hub (ATOM) $ 8.67
stellar
Stellar (XLM) $ 0.115983
okb
OKB (OKB) $ 55.86
arbitrum
Arbitrum (ARB) $ 1.22
hedera-hashgraph
Hedera (HBAR) $ 0.089637
immutable-x
Immutable (IMX) $ 2.20
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,209.14
bittensor
Bittensor (TAO) $ 481.66
dogwifcoin
dogwifhat (WIF) $ 3.12
vechain
VeChain (VET) $ 0.042349
maker
Maker (MKR) $ 3,139.02
kaspa
Kaspa (KAS) $ 0.120361
the-graph
The Graph (GRT) $ 0.289030
injective-protocol
Injective (INJ) $ 29.50
optimism
Optimism (OP) $ 2.51
fetch-ai
Fetch.ai (FET) $ 2.48
pepe
Pepe (PEPE) $ 0.000006