The price of Bitcoin (BTC) was on the rise for a brief moment, possibly misleading some traders into opening long positions, before falling back below $40,000 late in the day. Let’s take a quick look at what traders think about the current price action and if today’s short break was nothing more than a test of upper resistance.
Resistance holds at the key moving averages
Analysis of Bitcoin’s weekly price action was discussed by cryptocurrency trader and pseudonymous Twitter user ‘Rekt Capital’, who public the following weekly chart noting that “Bitcoin is now hovering below the green 21-week and blue 50-week EMAs of the bull market.”
Rekt Capital said:
“Breakouts beyond these EMAs have preceded huge rallies. Turn these bull market EMAs into support and we will see the bull market momentum resume.”
Bitcoin’s Correlation With Tech Stocks Offers Insight
Despite all the macro factors affecting global financial markets, Bitcoin remains “stuck in the middle of its $35,000 to $45,000 range,” according to David Lifchitz, managing partner and chief investment officer at ExoAlpha. Lifchitz noted that BTC has behaved more like a risky asset than an inflation hedge.
The proof of this is the high correlation between the prices of BTC and those of the Nasdaq in recent months.
According to Lifchitz, if Bitcoin’s “correlation with speculative tech stocks remains high,” the planned series of interest rate hikes by the US Federal Reserve will at some point “turn toxic for risk assets.” , which could translate into declines in the price of Bitcoin.
Overall, Lifchitz suggests that for investors who are convinced of its long-term potential, “Bitcoin should be actively speculated on while it bounces off the range.”
$42,300 is a crucial level to watch
According to independent market analyst Michaël van de Poppe, $42,300 it is the crucial level to be overcome.
Van de Poppe said:
“This is also a daily break. If it breaks I assume a retest of $46,000 is just around the corner and possibly $50,000.”
Analyst and pseudonymous Twitter user “Plan C” provided more evidence suggesting that BTC could soon trend higher, and public the following graph in which the confluence of several analytical measures for the Bitcoin price is observed.
Plan C said:
“The last 4 times the blue and purple lines were below the green line for so long the bottom of Bitcoin was already marked.”
The total cryptocurrency market capitalization currently stands at $1.881 trillion and the Bitcoin dominance ratio is 41.2%.
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