Bitcoin’s price has performed significantly better than it did a week ago. The price of bitcoin has now risen above the highly desired point and restored some trust in the market. The current position of the digital asset is however unstable. Although it appears to be able to move above $31,000, the immediate implications of this recovery are still unclear.
Fakeout, Breakout or Fauxout?
Noting that bitcoin prices fluctuated for years between $29,000 to $30,500 is significant. This was because the cryptocurrency has been consolidated for the longest period of time. It had broken free from this point with its latest recovery. But there hasn’t been enough by the way of recovery to simply be sure that this is one that will continue.
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According to some indicators, this could mark a pivotal moment in the bitcoin price. The direction of bitcoin’s digital assets for the remainder will depend on where it takes us. It would be necessary for the cryptocurrency to establish this position as a breakout, and it should range higher, then break its next major resistance, which is at $34,500.
Given that bitcoin remains stuck at $31,000, any rally to $34,500 will need tremendous momentum. If this occurs, the digital asset could establish support at that same level as it did at the start of the year.
Source: Arcane Research| Source: Arcane Research
If the market reverses, then a possible takeout could have significant implications. As evidenced by the market movement over the past few weeks, bitcoin has been able to maintain strong support of $29,000. A break below $29,000 would likely cause bitcoin to test the $25,000 level of support before it starts a new recovery trend.
Bitcoin Turning Bullish In Short-Term
While the chart shows a very favorable price for bitcoin in the short-term, that depends on its ability to hold on to it’s current price. The digital asset has been trading comfortably above its 20-day moving mean since its recent recovery of $31,000. This indicates a decrease in market sell-offs, and possibly a recovery to the 50-day moving-average levels.
BTC is continuing to recover | Source: BTCUSD on TradingView.com
Since its 9th red week-end close, bitcoin’s losses have slowed down significantly. It has been the longest losing streak in its history. This has even exhausted sellers. This is a welcome improvement for the market.
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This could mean that sell-offs are continuing to fall. If so, the potential breakout could lead to a bull market rally and end the losing streak.
Bitcoin was trading at $31,557 when this article was written. Bitcoin is heading for its first green-closing in two months.
Featured image taken from MARCA and charts from Arcane Research and TradingView.com
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