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What’s Panning Out in the Cryptospace, Is a Reversal on Cards for Bitcoin?
Bitcoin prices seem to be finally taking a breather from the speculative sell-off seen in the digital currency over the news of double spent.
To Know More, Do Read: Bitcoin Takes a Breather After Worst Week Since March 2020, What’s Next?
The prices of the asset is now responding both upside and downside after a few trading sessions of consolidation. However, the risk of the downside movement seems to be getting stalled, but yet has not been mitigated, especially for short-term traders.
Bitcoin Daily Price Chart (Image Source: EODHD/Others Eikon Thomson Reuters)
On following the daily chart, it could be seen that the currency is now taking support at the 50-day exponential moving average, which is overlapping with the -2 Standard Deviation of the 20-day simple Bollinger Band®.
- In the recent past, Bitcoin prices have broken below the short-term upward sloping trendline, which should now act as immediate hurdle for the currency. The mean value of the Bollinger Band® (20-day SMA) is falling around the same region, and if the currency mean reverts, it should ideally face some pressure there.
- A break and price action above the same should seed bullish sentiments.
- On the contrary, if the currency continues its consolidation before showing any upside/downside movement, the extended trendline level should act as the primary resistance, which is coinciding with the +2 Standard Deviation of the 20-day simple Bollinger Band®.
- Just like its short-term hurdle, a break and price action above the extended trendline should seed bullish sentiments.
- On the flip side, the current support is crucial, and a break and price action below could attract bears, prompting the currency to test the 200-day EMA or trade between its 200-day EMA and 50-day EMA.
On following some technical indicators, it could be seen that the On Balance Volume is sloping downside over lesser volume towards the up action and is moving in tandem with the price behaviour.
- However, the ADX is sharply sloping downside while the spread between the plus DI and minus DI is narrowing down, reflecting that the downward movement in the currency is slowing down.
- The balanced volatility further reflects on indecision and slowed momentum in the currency.
While the technical aspects give us ideas and possibility of the upcoming direction in any assets, traders should always keep the ongoing scenarios and fundamentals around the asset to reckon its future.
And, at present, Blockchain – a technology on which many cryptocurrencies are built upon, is gaining mainstream over its vast applications in decentralised finance or DeFi.
Currencies such as Bitcoin or Ether acts as tokens providing certain rights to the developer of the Blockchain; thus, the ongoing heat around this space is one of the most important factors which could influence prices of cryptocurrencies.
To Know More, Do Read: Ether At All-time High; Outperforming Bitcoin, Things You Should Know!
