Bitcoin’s next weekly close may trigger the most bullish buy signal since 2020 (BTC price analysis)

[ad_1]

Recent BTC price action has intensified after BTC closed above the 200-day moving average line on the daily period, but then closed below that important key level on Thursday.

However, things turned bullish, as the price of BTC returned to short term support, backtested the downtrend line at $ 43.8,000, managed to hold the support level, and then printed a bullish engulfing candle the next day to recover the 200 day moving average, start the current weekend trading on a positive note.

Chart by TradingViewThe Weekly Close: Why Is It Important For Bulls?

The short-term pullback resulted in lower volume, a sign of weakening selling pressure, as well as constant spot currency exits.

At this time, no sign of long-term big-holder selling. Therefore, the current pullback can be seen as a technical sell off as the price action hit slightly overheated and overbought levels. However, it is essential that the bulls protect the 200 day moving average as support.

As we reported earlier, this week is particularly important for bitcoin techniques: Bulls need to push BTC higher in the weekly close above the 21 week moving average, which currently sits around 43, $ 9,000, as well as the 200-day moving average line, which is currently around $ 45.3,000, to trigger one of the more bullish technical buy signals in the continuation of the bull market’s comeback. .

The last time we had such a 21-week bullish weekly MA cross was in April 2020, after the COVID19 crash.

The fundamentals are solid: be prepared for corrections along the way

At this point, several long-term fundamental buy signals have flashed, such as the hash ribbon confirming a bullish cross, foreign exchange reserves at multi-year lows, and BTC miner reserves trending higher for several months. This suggests a further rise in the coming months.

Despite the uptrend, and just with every healthy rally, market rallies need to be corrected to slow momentum, rebuild a base, and then continue rising.

This helps to make the rally more sustainable. BTC has risen significantly from a low of $ 28.8,000 to a recent intraday high of $ 48.1,000 at the time of writing, or more than 65% in 3.5 weeks.

As a result, and in the last few hours, we have seen some crazy swings in the price of bitcoin, liquidating both long and short positions, as shown in the charts below. These short-term fluctuations are most likely leverage that is eliminated.

CryptoQuant data shows that spot exchange reserves have remained stable during this recent pullback, suggesting that the sell-off is coming from the existing supply on spot exchanges. Typical retailers leave their BTC on exchanges, while institutions and whales immediately remove their BTC from exchanges after purchase due to counterparty risk.

In conclusion, we’ll have to see where BTC closes the weekly candle (Sunday midnight) relative to the 21-week, 200-day moving average. BTC bulls may be waiting for the most critical technical buy signal to flash to re-enter the bull market pursuit.

SPECIAL OFFER (Sponsored) Binance Futures 50 USDT Voucher FREE: Use this link to sign up and get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

PrimeXBT Special Offer: Use this link to register and enter the code POTATO50 to get a 50% free bonus on any deposit up to 1 BTC.

Disclaimer: The information found on CryptoPotato is that of the cited authors. It does not represent the views of CryptoPotato on whether to buy, sell or hold investments. You are advised to do your own research before making any investment decisions. Use the information provided at your own risk. See Disclaimer for more information.

TradingView cryptocurrency charts.

[ad_2]