Bitcoin is in a downward trend and, although there have been multiple recovery attempts, the price remains far from its peak. Although there are several indicators that can point to bullish and bearish trend, the majority of these indicate that they lie in the middle. A single indicator points to further upside, which could add as high as $6K on the value of the digital asset.
This is What the Daily OBV Chart Suggests
Twitter user cryptoeducation and market analysis posted recently a chart that showed what OBV might mean for bitcoin. This chart shows the movements of previous transactions. Income SharksThis shows that cryptocurrency has reached an important level that may allow it to continue growing. In July 2021, the cryptocurrency last made this movement in the charts.
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We’ll recall that July/August was an important time period for the digital asset. It was the first occasion that bitcoin reached the $60,000 mark. In just weeks it had risen from $30,000 and reached a new record high of $60,000 in a matter days. This all started with a double bottom created by bitcoin on OBV charts. It has again followed the same pattern, and if historical data is to be believed, this could signal a new rally.
OBV chart: Bitcoin has reached its bottom| Source: Income Sharks
The chart shows that the digital asset formed a second double bottom, marking a bullish double V spike. This could indicate that the price is likely to break below $50,000. This signal is not only important, it’s almost even more bullish. And what’s more, this could very well signal the bottom of the downtrend, suggesting that the digital asset may begin another bull rally.
Bitcoin is starting a new uptrend
Bitcoin once more has entered a recovery trend which has taken it to $44K. It had already claimed the point earlier this month but bears were able to pull it down and push it away from $46K, which would have solidified its entry into another bull markets.
Now, the digital asset trades above its simple moving average of 50 days. This shows that bears have lost hold of the market, but doesn’t completely eliminate the possibility of a slip downwards. The sentiment is skewered towards majority buy, but not enough to make it a significant shift.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
The next resistance level is 44,900. Here, bulls are likely to face strong opposition from bears. To eliminate the risk of further downside, Bitcoin must still settle above $46K. It will slip below the current price to reach $42K. $42,665 is its 1st major support level. If it falls below that level, the bulls will fight to control $41,339.
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Bitcoin trades at $44,080 as of the writing of this article, having hit $44,800 on Wednesday morning. The outlook for the remainder of the trading day is bullish. BTC will close the day at $44K.
Featured image by Finextra. Chart from TradingView.com