Bitcoin Tests Critical Resistance Following Overnight Bounce; What’s next?

  • Bitcoin has seen some huge momentum throughout the morning which has allowed it to write off a good portion of the losses incurred as a result of yesterday’s dive
  • This sale marked a capitulation among investors, with many clearly fearing that the multi-month rise that led BTC to peaks at $ 42,000 was imminent and that a deep reversal was imminent.
  • However, bulls have since gained full control over the crypto price action, and are now in a position to see much further in the near-term upside
  • One analyst highlights the recently broken 200-day moving average as a key resistance that bulls are now trying to overcome
  • A solid cut above this level could confirm that this bounce marks a full reversal of the recent downturn

Bitcoin volatility has so recently led the market to see some tremendous upheaval over the past week, which has largely favored bears.

However, BTC is now reversing its recent losses and may be on the threshold of continuing its parabolic improvement, which could mean that this latest dip is just a final impetus for over-leveraged investors.

One trader is now keeping a close eye on Bitcoin’s response to its 200-day moving average.

He notes that this level has become an objection and that a flip above it would be technically significant.

Bitcoin Bounces Following Selloff Yesterday

Bitcoin and the entire crypto market have seen some sharp sales over the past few days, which reached a high point yesterday evening when investor capitulation triggered a massive downturn that sent it to $ 28,000.

It has since written off these losses and is in the process of reversing this decline. At the time of writing, the crypto is trading up 6% at its current price of $ 32,600.

As long as bulls maintain this momentum, there is a strong possibility that the market will continue to climb higher in the days ahead.

BTC Must Flip Average Moving 200 days back to support

The 200-day moving average has long been a key level for Bitcoin, often playing the role of support and resistance.

Overnight, this level was cut lower for the first time in months, and bulls are now trying to turn it back into support, as one analyst he explained:

“The cloud has been supporting the price for 10,000 $ and is now being tested for resistance for the first time. This is where bulls want to see bounce, the 200ema is not quite the opposite to get. ”

Bitcoin

Image Courtesy of Teddy. Source: BTCUSD on TradingView.

Unless Bitcoin is facing a surge of sales pressure that reverses this rebound, there is a strong possibility that bulls will continue to regain control of cryptocurrency’s price action.

Featured image from Unsplash.
Charts from TradingView.

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