Is Bitcoin Heading to a Correction After Short Recovery; Vital Trading Levels
Bitcoin had finally moved past $40,000 in the past 24 hours as a result of the Luna Foundation Guard (LFG) BTC’s buying frenzy. However, the price action was dampened too quickly as the coin dropped 4% after registering a 7% gain at the time of writing. Bitcoin’s 24-hour trading volume also took a hit at the time of writing.
Bitcoin’s fear index read 28 which corresponds to the feeling of fear, this reflected fear around another crash for the king coin. As it turns out, there hasn’t been much impact on prices even after purchasing LFG Bitcoin.
LFG had added 2,508 BTC, which is worth more than $100 million, to its UST reserve at the beginning of this week. This has brought the BTC number to $42,406.92.
In addition, inflation in the US rose by 8.5%, a rate not recorded for more than 4 decades. The global cryptocurrency market cap was $1.95 trillion after falling 2.5% in the past day.
Bitcoin Price Analysis: Four Hour Chart
BTC started trading just above $40k on the four hour chart. Image source: BTC/USD on TradingView
Bitcoin was trading at $40,030 at the time of writing, just over $40,000. The coin had managed to breach its immediate resistance of $40,956 in the past 24 hours.
However, at the time of writing, the asset was trading below the aforementioned resistance mark. Consistent push from the bulls during the next trading sessions could push prices as high as $42,000.
A drop from the current price level would mean that BTC would trade near the $38,000 support line. If we didn’t stay above this, the next support levels were at $37,000 and then $33,000.
Trading volume started to pick up at the time of writing as the last trading session closed in green, signifying bullish action.
Related literature | The Nightly Mint: Daily NFT Recap
Bitcoin is still oversold on the four-hour chart. Image source: BTC/USD on TradingView
Bitcoin had, however, had a brief recovery in terms of buying pressure, after the recent fall, buyers exited the market. For most of this month, BTC witnessed a significantly low purchasing power.
On the Relative Strength Index, the coin was seen below the half-line, indicating that sellers outweighed buyers in the market. This also matched the fear index. Getting buyers to re-enter requires broader market strength.
Chaikin Money Flow, which determines capital outflows and inflows, was also in line with the RSI. Capital outflows were greater than capital inflows, as can be seen on the four hour chart.
Related literature | Ethereum at $3028, where is the next critical support level for ETH?
Bitcoin is showing the start of positive price momentum. Image source: BTC/USD on TradingView
Bitcoin could attempt to regain its older levels as the coin floats again close to the $40,000 resistance. The asset showed a positive change in its price as shown by the indicator above.
MACD determines the price movement of the currency.
BTC was witnessing a bullish crossover at the time of writing, which meant that BTC could try to learn its immediate price cap in subsequent trading sessions. MACD had flashed green histograms at the time of writing, signifying bullishness.