Bitcoin ‘waves are not calm, sea is not calm’ as RSI breakout challenges ‘boring’ weekend
Bitcoin hovered around $38,000 on Jan. 30 as the “ragged” weekend still offers a chance for a solid weekly close.
BTC/USD chart 4 hours | Source: TradingView
The waves are not calm, the sea is not calm
Data from TradingView shows BTC reclaiming the $38,000 mark after seeing a local high of $38,782 yesterday.
Despite the strong “off-hours” performance, some analysts believe BTC is a solid bull game that doesn’t follow traditional market guidelines.
Michael van de Poppe was summary in his latest Twitter update:
“Still shaky waters for Bitcoin. Monitor the $37,000 level to see if it holds. If not, I expect the price to test the low to create bullish divergence on the daily chart. If it holds, a break above $38,500 is likely to be seen. Weekend time: boring”.
However, it appears that Bitcoin is slowly recovering its daily highs on the timeframe after hitting lows below $33,000 earlier in the week, albeit at a sluggish pace.
For trader, investor and entrepreneur Bob Loukas, strength lies in how often the pair closes above the 10-day moving average (MA). Brothers said:
“Two consecutive closes above the 10-day moving average suggest that the price is now making the lows (on a 60-day cycle). However, a return to the $35,000 range is possible.”
On the other hand, hopes of ending the week at the $39,600 resistance do not appear to have materialized at the time of writing.
“The crypto market is full of breakout traders. What’s the easiest way to hire them on a low morale weekend? Forced to move,” skeptical analyst and trader Cantering Clark say more on twitter.
RSI excites bulls
Meanwhile, on-chain data analysis, famous analyst Matthew Hyland disclosure More bullish signals are coming from the BTC Relative Strength Indicator (RSI).
Across multiple chart periods, the RSI has recently touched its most “oversold” level since the March 2020 coronavirus crash.
The indicator is used to determine how “overbought” or “oversold” BTC is at a given price, thus signaling its ability to sustain a given trend.
Due to a slight rebound from the lows, the RSI currently appears to be testing a multi-month downtrend since November.
“Two previous breakouts over the past year have led to major bullish moves,” Hyland added.
Bitcoin Daily RSI chart and price BTC/USD | Source: Matthew Hyland
Renowned analyst Justin Bennett outlines a possible scenario in which Bitcoin gains bullish momentum and heads towards $50,000.
In one strategy session Newly, Bennett says Bitcoin is currently trading in an ascending channel on a lower timeframe and is poised to rally above $40,000 before the month is out.
“If bitcoin can break these highs – around $37,500 if this breakout level is hit, I think there will be $40,000 here in the next few days, possibly up to $42,000 in cash, basically before the end of January. ” .
The source: Justin Bennett
Although Bitcoin looks bullish on shorter timeframes, the strategist explains why bulls are likely to face massive selling pressure around the $40,000 price area.
“As long as bitcoin stays within this ascending channel the price will rally towards $40k-$42k to really test this range as it is a huge range for bitcoin. In the last few months it has even been seen as a horizontal zone and indeed this area has gained tremendous prominence over the past 12 months. The market is currently trading below it on the daily and weekly charts.
So $40,000-42,000 will be crucial to whether Bitcoin breaks out towards $45,000-46,000 or the price falls lower in the coming weeks.”
If bitcoin bulls try to break the $42,000 resistance, a breakout could propel BTC as high as $50,000, Bennett said.
“Bitcoin really needs to break out above $42,000, close above it at $45,000-46,000 and possibly $50,000. Until that happens, $40,000-$42,000 will be a very strong resistance.”
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