Should you sell Bitcoin [BTC]? Here’s what its recovery prospects are like

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Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice.

After an expect­ed rec­tan­gle bot­tom break­down, Bit­coin [BTC] lost the vital $28K sup­port while find­ing rest­ing grounds near $19.2K. While the recent move­ments affirmed a side­ways mar­ket, sell­ers have kept the coin below the dai­ly EMA ribbons.

Pay­ing heed to a host of bar­ri­ers at the $21K lev­el, BTC could con­tin­ue its lag­ging squeeze in the com­ing days. A close below the cur­rent pat­tern would open door­ways for poten­tial short­ing opportunities.

At press time, BTC was trad­ing at $20,423, up by 1.97% in the last 24 hours.

BTC Daily Chart

Source: Trad­ingView, BTC/USD

Main­tain­ing a con­ser­v­a­tive stand­point, BTC could see a con­tin­ued tight phase in the $19.2K-$21K range in the com­ing ses­sions. Over the last three weeks, the king coin has formed a bear­ish pen­nant-like set­up in the dai­ly time­frame. How­ev­er, the coin has been strug­gling to break the chains of its 20 EMA for near­ly a month now.

As the upper trend­line of the pen­nant coin­cid­ed with the 20 EMA lev­el, the $21K lev­el could impede buy­ing efforts. Mean­while, the price action squeezed with­in the pen­nant while prepar­ing for a like­ly volatile move.

Any close below the pat­tern would make room for a short­ing oppor­tu­ni­ty. In this case, the take-prof­it lev­els would lie in the $17.1K zone. But if the BTC HODLers are keen on pro­tect­ing the $18.9K-$19.2K range, the coin would see an extend­ed side­ways market.

In an unlike­ly case of a bear­ish inval­i­da­tion, a close above the pat­tern could aid the buy­ers in retest­ing the three-month trend­line resis­tance (white, dashed).

Rationale

Source: Trad­ingView, BTC/USD

The Rel­a­tive Strength Index (RSI)’s posi­tion below the mid­line has res­onat­ed with the bear­ish nar­ra­tive for the three months. A close above the 40-mark could help buy­ers delay the bear­ish moves.

With the Chaikin Mon­ey Flow (CMF) wit­ness­ing a steep growth, buy­ers inflict­ed an uptick in the mon­ey vol­umes. But its recent peaks have bear­ish­ly diverged with the price action. Also, the Awe­some Oscil­la­tor (AO) despite show­ing slight improve­ments need­ed to find a close above the zero-line to reveal a bull­ish edge.

Conclusion

In light of the bear­ish pen­nant approach­ing the EMA resis­tances, BTC could see a near-term set­back on the charts. A con­firmed break below the pat­tern and the $18.9K-mark would reaf­firm the tar­gets men­tioned above.

Fur­ther, investors/traders should fac­tor in the macro-eco­nom­i­cal fac­tors affect­ing the broad­er sen­ti­ment. This analy­sis will help them to increase the chances of a prof­itable bet.

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