Is Bitcoin Headed For A Correction After Brief Recovery; Vital Trading Levels

Bitcoin finally crossed $40,000 in the past 24 hours due to the Luna Foundation Guard (LFG) BTC buying spree. However, the price action slackened quite early as the coin, after posting a 7% rally, is down 4% at the time of writing. Bitcoin 24-hour trading volume has also taken a hit at the time of writing.

Bitcoin Fear Index reading 28 Corresponding to feelings of fear, he reflected this fear surrounding another collapse of the King’s coin. It turns out that there was no significant impact on prices even after buying LFG Bitcoin.

Earlier this week, LFG added 2,508 BTC worth over $100 million to its underground reserves. This took the BTC count to $4,2406.92.

In addition, the inflation rate in the United States rose by 8.5%, a rate not recorded in more than 4 decades. The global cryptocurrency market cap has reached $1.95 trillion after a 2.5% drop in the past day.

Bitcoin Price Analysis: Four Hour Chart

BTC just started trading above the $40K mark on the four-hour chart. image source: Bitcoin / US Dollar on TradingView

Bitcoin was trading at $40,030 at the time of writing, and was looking at just over $40,000. The coin managed to surpass the immediate resistance of $40,956 in the past 24 hours.

However, at the time of writing, the asset was trading under the aforementioned resistance mark. The continued push from the bulls during the following trading sessions could push the price up to $42,000.

A drop from the current price level could mean that BTC will trade near the $38,000 support line. Upon failure to stay above this level, the next support levels were $37,000 and then $33,000.

Volume has started to rise at the time of writing as the last trading session closed in green, indicating upward movement.

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Technical Analysis

Bitcoin is still oversold on the four-hour chart. image source: Bitcoin / US Dollar on TradingView

Bitcoin received a short recovery in terms of buying pressure, however, after buyers exited the market last fall. For most of this month, BTC has seen significantly lower buying power.

On the RSI, the coin was seen below the half line which indicates that there were more sellers than buyers in the market. This corresponds to the fear index as well. For buyers to re-enter, broader market power is required.

Chaikin Money Flow, which identifies capital outflows and inflows, was also in line with the RSI. Capital outflows were more than capital inflows as seen on the four-hour chart.

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Bitcoin is showing the beginning of positive price momentum. image source: Bitcoin / US Dollar on TradingView

Bitcoin may try to recover its old levels as the coin once again hovered near the $40,000 resistance mark. The asset showed a positive change in its price as evidenced by the above indicator.

MACD determines the price movement of a currency.

BTC has seen a bullish cross at the time of writing, which means that during the following trading sessions, BTC could attempt to teach the spot price ceiling. The MACD is flashing green histograms at the time of writing which means an upward trend.

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