After oscillating within a down-channel for over seven months, Bitcoin (BTC) is now testing a critical resistance point that could determine its next move. Following a strong 18% rally after bouncing off the $53.8K support level, BTC is pushing toward the upper boundary of its descending channel. At press time, the flagship cryptocurrency was trading around $63,446, facing a crucial juncture in its technical chart.
The Golden Cross And Bullish Momentum
A key bullish indicator recently emerged on Bitcoin’s daily chart—the 20-day Exponential Moving Average (EMA) crossed above the 200-day EMA, signaling a ‘golden cross.’ Historically, this technical pattern is a precursor to further upward momentum. With Bitcoin hovering near the channel’s resistance line, the bulls now face the task of pushing past this barrier to confirm a breakout. If successful, Bitcoin could rally toward the $67,000 to $70,000 range, marking a potential end to its months-long downtrend.
The Relative Strength Index (RSI), which stood at 62.52 at the time of writing, reflected bullish momentum but remained below the overbought zone. This indicates there may still be room for an upward push if buyers sustain their activity. However, the RSI also displayed a warning signal—a potential bearish divergence, as it marked higher highs while Bitcoin’s price action remained flatter.
Resistance or Rejection?
Despite these bullish signals, Bitcoin has yet to break through the upper boundary of the down-channel. This resistance level is crucial, and failure to clear it could lead to a pullback. Analysts suggest that if BTC faces rejection at this point, it could retreat to the $60,000 level or even retest the $55,838 support.
On the flip side, the Moving Average Convergence Divergence (MACD) indicator continues to support a bullish outlook, with the MACD line sitting comfortably above the signal line. This reinforces the possibility of a sustained rally, but traders remain cautious due to a tug-of-war between buyers and sellers around the $63K mark.
Market Sentiment and Derivatives Data
Despite Bitcoin’s recent price surge, derivatives data indicates a more reserved market sentiment. The BTC trading volume dropped by nearly 20%, signaling weaker daily movement, while open interest fell slightly, reflecting hesitation among traders to open new positions at current levels. The long/short ratio across the broader market stood at 0.9869, suggesting a balanced sentiment with a slight lean toward short positions.
Interestingly, top traders on Binance were more optimistic, with a long/short ratio of 1.0172 in favor of bulls, indicating stronger confidence in a potential breakout.
Also Read: MicroStrategy’s $10 Billion Bitcoin Bet – How A 62% Return Validates Their DCA Strategy
As Bitcoin teeters on the edge of its down-channel, the golden cross between the 20-day and 200-day EMAs signals a bullish possibility. However, traders are advised to watch for a confirmed breakout above the channel’s upper boundary. If BTC can close above this resistance, it could mark the beginning of a new bullish phase, propelling the price toward the $70,000 region.
On the other hand, failure to break through could result in short-term bearish pressure, with potential dips toward $60,000 or lower. The next few days will be pivotal in determining whether Bitcoin can finally reverse its seven-month downtrend and head for new highs.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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