Bitcoin Bounce Is at Crucial Level
- Uptrend may have just been saved
- Resistance above observed
- Bitcoin has been acting like gold
The bitcoin bounce over the weekend was welcome news for traders, as we have seen a trend line break recently. Unfortunately, we still have the 50 day EMA just above, which could cause some issues, so we need to pay attention to that. All things being equal, it’s very likely that we will make a serious attempt at breaking above that level, as we are starting to reach towards major support levels.
The $9250 level has offered major support a couple of times in the recent past, and the fact that we have bounced from there over the weekend is a good sign. Although we had broken below the uptrend line that you see on the chart, the reality is that there was massive support just underneath there as well. This means the trend line break by itself wasn’t necessarily a reason to start selling. Even with that, it is not a good look.
If you reach back a few days into our analysis, you will see that we noted the $9250 level as crucial. The fact that we have held above there is the first hurdle cleared by the bullish traders to save the overall uptrend. This uptrend has been very reliable until the last couple of months where we have been digesting. Those gains are going to be crucial, but at this point I think it’s only a matter of time before we have to make some type of longer-term decision.
There is resistance above
There is resistance above in the form of the 50 day EMA, which is currently trading at roughly $10,100. Beyond that, there’s also the previous uptrend line, which could offer selling pressure. Ultimately, if we can break above both of those small hurdles, we can start looking towards the $12,000 level again. With the economic outlook as it stands, it does make some sense.
Global financial situation
Bitcoin has been acting a lot like gold lately, as people ran from various fiat currencies around the world with a slowing global situation, and the central banks were doing everything they could to bring down rates. As such, it is very likely that this market will continue to grind higher. Once we get above those resistance barriers mentioned earlier, we could notice an upsurge at that point.
The other argument of note is that, in the event of some good news – perhaps due to a more hawkish Federal Reserve than anticipated – that could send this market down to the 200 day EMA, which is currently hanging about the $8000 level right now. Regardless, we have a small $750 range or so that we are looking at as a deciding region to pay attention to. It is only a matter of time before we break out, and when we do, we could have a significant move.