September 21, 2021

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Bitcoin Price Analysis: BTC Needs to Close Weekly Candle Above This Major Level


BTC has definitely surprised market participants lately after a 10-day green streak, managing to break above $40K. Just overnight, BTC staged a last-minute rally and made the first daily close above the top of the trading range closing at $42.2k.

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Chart by TradingView

Bitcoin Overcomes $40K

On July 28th, 2021, the third-largest BTC whale transferred 3000 BTC to Coinbase, signaling near-term caution on price. As we reported, this has been a local top indicator on quite a few occasions in the past. The cryptocurrency then saw a minor correction from a high of $40.9k to a low of $38.3k.

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The bulls managed to stage a solid recovery, marking the first daily close above the 2-month long trading range between $30k and $40k. This is the first major step in transitioning from the accumulation phase back into bull market continuation.

Throughout the impressive 10-day streak, BTC momentum on multiple time frames continued to trend higher, pushing above neutral zones. This is a very bullish signal of another large leg higher mid-term as these signals have flashed multiple times before in previous bull markets.

Notably, when BTC makes 9 consecutive daily candles higher, this has historically led to mid-term rallies, as shown in the chart below.

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Chart by TradingView

Previous resistances are now near-term support at $41.3k, $40.9k, and $40k. Ideally, these levels need to hold on a backtest.

Confirmation Needed

The recent price action is very bullish for BTC, but we have to wait for the weekly close for validation. Last week, BTC printed a weekly hammer candle, a signal of a potential reversal, especially after snapping back above $30k. The cryptocurrency needs to close at the highs this week to validate the pattern.

Although near-term price action is bullish, BTC remains below resistance at the 200-day MA and the 21-week MA, both critical levels to reclaim. The technicals will turn very bullish if BTC can successfully close and stay above these levels.

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Chart by TradingView

In aggregate, when considering bullish technicals, significantly improving momentum, bullish on-chain metrics in net outflow exceeding inflows, accumulation, and the recent drop in exchange reserves, BTC hash rate recovering, and record network user growth, the current set-up looks very favorable for the bulls.



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