Bitcoin is slowing down as it makes its way from a high of about $30,000. The top cryptocurrency by market cap is still posting gains over the past week (3%) but could retest support at lower levels.
Related reading | Bitcoin rebounded above $40,000, but may struggle to maintain position
At the time of writing, Bitcoin is trading at $41,300 with a sideways movement over the past day. The cryptocurrency continues to trade in a narrow range but soon it could see an increase in volatility.
Data from Material Indicators (MI) is recording short term resistance as BTC price is above its current levels. There are more than $5 million in orders from $41,300 to about $41,400. This may prevent the price from continuing its upward momentum.
On the other side of the trade, there is a significant support for BTC price at $39,000. At these levels, the cryptocurrency records $9 million in bid requests with much more liquidity at lower levels. This indicates that Bitcoin could rebound strongly if it returns to that territory.
A pseudonymous trader recently noted that the bitcoin price has seen a steady rejection from the 200 exponential moving average (EMA), a level often correlated with the direction of an asset’s direction. The current EMA for BTC is around $42,000.
In this sense, Bitcoin needs to break above this price point to continue rising to further resistance. This is likely to be around $45,000 and $48,000. The latter stands as a great major time frame for the cryptocurrency.
The pseudonymous analyst is bullish on the ability of BTC price to break above the 200 EMA on the 4-hour chart.
BTC dollars Rejected from 4H 200EMA again. As long as the price cannot at least break this level, we will remain stuck in this downtrend.
200EMA is still heading down as well although a breakout is finally imminent.
– Daan Crypto Trades (DaanCrypto) April 20 2022
Like NewsBTC mentionedBitcoin records a 90-day decline in implied volatility. This metric stands at its lowest level in November 2020, according to data from Arcane Research. At the time, the drop in volatility and a long period of Bitcoin consolidation preceded a major rally to its current all-time highs.
Why US Dollar Weakness Could Push Bitcoin Higher
It appears that the BTC bulls are showing more strength. Low liquidity at $30K appears to have moved higher, leading to a faster bounce in bitcoin prices. This contributes to the bullish notion of the cryptocurrency as it could be preparing for an imminent break of short to medium term resistance.
About the latest analyst David Ellis She said:
(…) I have been staring at charts for extended periods of time in the past week plus. I haven’t seen an uptick in buying on dips since Q4 2020. Again, it’s too early to get too excited, but that’s an encouraging sign IMO.
Related reading | Ripple CEO Says Bitcoin Tribalism Is Hindering Crypto Industry
The US dollar was rising on the back of an interest rate hike from the US Federal Reserve. Bitcoin is negatively correlated with the currency, Arcane Research has found. This may point to more bullish potential for digital assets.