Bitcoin (Bitcoin) And the cryptocurrency market fluctuated this week False news Around Litecoin (LTC) Causes volatility to soar. However, the market structure has not changed. In fact, as the golden cross begins to form, the price of Bitcoin may bottom out.
Second, foreign exchange reserves are Hit a record low, This is a huge signal of strength that most investors are taking their bitcoins from exchanges, thereby reducing the overall supply that can be sold on the market.
Will Bitcoin explode due to the golden cross?
The daily chart of BTC/USD shows some key information. The first and most important is the upcoming potential golden cross.In summer, the main focus is On the cross of death, As market sentiment turns extremely negative, many traders expect more downside.
However, the market has been in an upward trend since then, and the crossing of the moving average (MA) is a very lagging indicator. But even if there is a crossover, it does not automatically mean that the market will continue to develop in that direction.
Currently, the golden cross is a bullish signal, especially when the price of Bitcoin is ready to break the moving average. If this happens and the price of Bitcoin is above these moving averages, then these levels can serve as new support for a larger rebound.
Key levels observed on the daily BTC price chart
A week ago, as the price of Bitcoin fell from $52,000 to $42,000, the market experienced a sharp correction. However, the price of Bitcoin fell at a nice support level, resulting in a very long wick. Such a long wick means buying pressure and new support levels.
As mentioned earlier, due to the fake news of the collaboration between Litecoin and Walmart, another volatility has occurred in the past few days. This initially caused a sharp rebound, followed by a sharp correction.
In such a volatile trend, the best way is to narrow down and check the market on a higher time frame, as these will usually give you an indication of the key levels to observe.
These key levels of concern are still between US$42,800 and US$44,000. As long as the region maintains support, it may continue to rise. In other words, the bearish divergence is accompanied by a sharp correction, but if the market stays above $42,800-44,000, the worst may have passed.
Therefore, the fake Litecoin news caused some market volatility, but maintained the key support between $42,800 and $44,000. This is the key conclusion here.
On the bright side, first, the price of Bitcoin must break through $47,000 because this is the current resistance. If it fails, it may continue to rise to $50,000 as the last obstacle before the potential all-time high test.
The total crypto market value holds key support
The total market value of cryptocurrencies shows vital support. As long as the total market value remains above US$2 trillion, it is possible to hit a record high.
The slight difference here with the Bitcoin price is that the total market capitalization has tested all-time highs. Once the total market value retests the all-time high again, the possibility of breaking the all-time high will increase.
However, it is most likely that the total market value of cryptocurrencies will reach record highs faster than Bitcoin, because altcoins have been performing better than Bitcoin recently.
Bullish divergence and falling wedges staged
Bitcoin’s four-hour chart shows a potential declining wedge structure that could break the upside. The key level to break the upside is the $47,000 resistance level, which has been a heavy resistance level since the most recent correction.
Once the price of Bitcoin breaks through $47,000, it is likely to continue to rise to $50,500, because there are not many levels between the prices that can be rejected, because the previous corrections were made in a very vertical manner.
Finally, this does not guarantee that the price of Bitcoin will rise. Overall, if the price of Bitcoin can construct a higher low near the $45,000 area, it will confirm a bullish divergence, and then a breakout may occur towards $47,000. This is still a strong resistance to breaking.
On the downside, the key support level held is between US$42,800 and US$44,000. If this support is not maintained, the 38,500-40,000 USD level should be the next focus area.
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.