CryptoWallCity vs MEXC Exchange

Bitcoin: Unraveling Breakthrough Potential and How Investors Can Leverage It

After the bears noticed fresh selling pressure at $47.5k in late March, the past two months have been a relentless attempt to break Bitcoin [BTC] 20 EMA (red).

While the short-term trajectory reveals a sideways market, BTC HODLers are clearly keen to defend the 16-month floor at $28.8k.

With the confluence of hurdles at $30.8K, BTC could resume its slow tightening phase. If any of these factors worsen sentiment, a close below the current pattern will present a short selling opportunity.

At the time of writing, BTC is trading at $30,526, up 5.18% over the past 24 hours.

From a somewhat cautious point of view rooted in the long-term downtrend, BTC could see a continued tight period in the $28.8k – $30.8k range in the coming sessions.

Over the past three weeks, the king coin has formed a rectangular bottom on the daily chart as well as the lower timeframe. As a result, Bollinger Bands (BB) have entered a tightening phase.

When the upper band of the BB coincides with the 23.6% Fibonacci level along with the 20 EMA, the $30.8K level represents a series of resistance levels. Meanwhile, price action fluctuates near the ‘expensive’ side of the BB line.

Any close below the rectangle will make room for a short selling opportunity. In this case, take profit will be in the $25K-$26K range.

However, in a relatively unlikely case of bearish invalidation, a close above the pattern opens up 10% of the upside. With the price closing above BB’s baseline, buying pressure has spiked over the past 24 hours.

Theoretical basis

The daily relative strength index (RSI) has yet to break out of equilibrium and confirm gains on the daily timeframe. But won’t the four-hour timeframe, the RSI predicts overbought results. Hence, increasing the chances of a short-term drop from the 23.6% level on the chart.

Even though +DI barely crossed -DI, the direction of BTC [ADX] looks pretty weak.

Inference

The bears still keep the broader trend in their control. Looking at the current hurdles at $30.8, BTC bears could reinforce the coin’s consolidation bias.

A close below the bottom of the rectangle could provide a 10% drop short selling opportunity.

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