Is this another opportunity for Bitcoin bulls
The past week has been rather quiet for Bitcoin as gains amounted to 2%. While BTC’s bullish pattern was still intact on the charts, there were some warning signs creeping into the market; however, a close above $48,000 would negate much of the anxiety. At the time of writing, Bitcoin traded at $46,789, down by 1% over the last 24 hours.
Bitcoin Daily Chart
Although Bitcoin flipped its 200-SMA (green) to bullish after 11 weeks on 9th August, buyers failed to capitalize on their advantage. Bulls were presented with another opportunity at the 61.8% Fibonacci Extension ($45,619) – a region that also clashed with the long term moving average, which could trigger another spike in the coming days.
Failing to do so could have some drastic results moving forward. An unfavorable outcome could see BTC retrace all the way towards the 38.2% Fibonacci level, from where the market would be vulnerable to losing its overall bullish structure.
Even though Relative Strength Index held in bullish territory, it has formed lower peaks at different levels. If this bearish divergence comes into a play, a drop can be anticipated towards the half-line from where the market would be a sensitive position.
The MACD was also on the cusp of a bearish crossover which pointed to a few near-term risks. Momentum was also choppy on the Awesome Oscillator and presented no clear direction moving forward. While all three indicators were still in comfortable positions, each of them pointed to some risks which were hard to overlook.
If the indicators do fall below each of their respective half-lines, expect the bears to press home their advantage. To overcome these signals, BTC needed to close above $48,000 now more than ever.
BTC did not have many lifelines to close above $48,000. RSI flashed bearish divergences, while MACD and AO were inching towards an unfavorable outcome. If an upward breakout is denied over the coming days, BTC could head all the way towards $42,000 and bulls would need to work hard to initiate another recovery.
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