Important bitcoin points
- Bitcoin rose before the New York opening bell on Tuesday.
- Traders flocked to accumulate the cryptocurrency again when it hit a classic level of support.
- Bitcoin trades within a short-term falling wedge and now expects to extend its recovery to $ 58,000.
Bitcoin surged higher ahead of Tuesday’s U.S. trading hours after falling to $ 53,000 during the Asia Pacific session.
The level also coincided with the 200-4H moving average of the cryptocurrency (the orange wave in the table below). Its historical importance as an aid in limiting Bitcoin’s downward attempts allowed traders to treat it as their level of accumulation. As a result, the BTC / USD exchange rate rebounded more than 2.5 percent during the European session.
As the New York opening bell approached, Bitcoin surged above $ 55,000, a psychological floor price. This raised expectations that the cryptocurrency would be above the mentioned level during the US session. A technical pattern supported the bullish forecast.
Bitcoin’s rebound from the 200-4H MA (and the $ 53,000 level) also coincided with a support confluence provided by a descending trendline. Meanwhile, another falling trendline could prevent the cryptocurrency from expanding its profits. Together, these trend lines formed a falling wedge, a bullish reversal pattern.
BTC / USD has been fluctuating within the wedge since March 10th.
After testing the pattern’s lower trendline as support, the pair bounces back to meet and test the upper trendline as resistance. It then pulls back to retest the lower wedge trendline for support. In total, Bitcoin has confirmed six rebounds and thirteen pullbacks.
Therefore, psychologically speaking, traders expect the cryptocurrency to recapture Wedge’s upper trendline, which is above the USD 57,000 level.
A shorter term bullish confluence comes in the form of on-chain indicators. For example, US cryptocurrency exchange Coinbase Pro warned of massive Bitcoin outflows from its hot wallets on Tuesday. It has been suggested that traders were pulling out their BTC holdings to hold them instead of selling them for other assets – fiat or crypto.
Meanwhile, some analysts advised traders to watch out for surprising declines. One of them, a pseudonymous company on Twitter, pointed out that Bitcoin is falling below rising trendline support over the medium term, indicating the risk of longer declines.
“[It] could be a fake but we need a strong buyback today, ”noted the independent analyst. “I’ll probably sit outside today and watch. Be careful with longings.”
Macro-economically, a recent rise in the US dollar index also brings declines for Bitcoin. Investors are returning to the greenback amid concerns over renewed geopolitical tensions and barriers to the European Union’s vaccination program, which has reduced appetite for euro and euro-based assets.