- Bitcoin experienced massive momentum over the course of the morning that enabled it to erase much of the losses incurred from yesterday’s slump
- This sell-off was a surrender among investors, and many clearly feared that the multi-month uptrend that led BTC to highs of $ 42,000 was over and a deep retreat was imminent
- Nevertheless, the bulls have now gained full control over the price development of the crypto and are now in a position to record a clear further upward trend in the short term
- One analyst points to the recently broken moving average of under 200 days as a major resistance that the bulls are now trying to overcome
- A firm break above this level could confirm that this rebound is a complete reversal of the recent downtrend
The recent volatility of Bitcoin has caused immense turbulence in the market over the past week, which has benefited bears in particular.
However, BTC is now reversing its recent losses and could be on the verge of resuming its parabolic uptrend, which could mean this recent decline was just a final cleanup for over-leveraged investors.
A trader is now closely monitoring Bitcoin’s response to its 200-day moving average.
He notes that this level has become a drag and that turning over it would be technically significant.
Bitcoin is bouncing back from yesterday’s sell-off
Bitcoin and the entire crypto market have seen some strong sell-offs in the past few days, boiling last night as investor surrender triggered a massive drop that brought them to $ 28,000.
Since then, it has eliminated those losses and is in the process of reversing that downtrend. At the time of writing, the crypto is trading 6% at its current price of $ 32,600.
As long as the bulls maintain this momentum, there is a good chance the market will continue to rise in the coming days.
BTC needs to put the 200-day moving average back on support
The 200-day moving average has long been a key level for Bitcoin and often played the role of support and resistance.
It fell below that level overnight for the first time in months, and bulls are now trying to convert it back into support, one analyst explained:
“The cloud has been supporting the award for $ 10,000 and is now being tested as a resistor for the first time. Bulls want to see a jump here, the 200ema is not a nice resistance. “
Image Courtesy of Teddy. Source: BTCUSD on TradingView.
Unless Bitcoin is exposed to strong selling pressures that reverse this rebound, there is a high likelihood that bulls will continue to regain control of cryptocurrency price action.
Featured image from Unsplash. Charts from TradingView.