Bitcoin and crypto markets rocked this week as fake news about LTC sparked volatility spikes. However, nothing has changed in the market structure. In fact, Bitcoin price could bottom out if the golden cross begins to form.
Aside from that, Bitcoin magazine reported that the reserves on the stock market hit a record low. This is a great signal of strength, showing that most investors are pulling Bitcoin off the exchange and reducing the supply that can be sold in the market.
Bitcoin recovers as a bear “exhausted” sales losses
According to new data, Bitcoin bears are “exhausted” and are even selling at a loss this week.
In a tweet today, analyst Philip Swift of the Decentrader platform sees a sustained upward trend in return on spending (SOPR).
SOPR: We have seen more on-chain sales at a loss in the past few days. This is bullish, especially after the aggressive summer sell-off.
Bears get tired. Time for the #bitcoin Cops are taking over very soon.
– Philip Swift (@PositiveCrypto) September 14, 2021
“We saw it Comeinand sell at a loss on the chain more in the last few days. This is bullish, especially after the heavy sell-off in the summer. Bears are getting more and more exhausted. Time to bullize bitcoin take over”.
SOPR switched to “Buy” for the first time since July last week. This is a classic metric used to determine oversold times in the Bitcoin market.
Last time, BTC rebounded to a local high of $ 53,000 over the next several weeks, and it is now more likely to repeat itself.
SOPR diagram of Bitcoin | Source: Decenttrader
SOPR isn’t the only bitcoin market component predicting a bullish comeback. Investors themselves are betting that the upward momentum will continue by adding to both large and small positions despite last week’s drop in prices.
Meanwhile, the group of non-selling BTC investors is definitely institutional. The proof is the news published on Monday that MicroStrategy bought an additional 5,050 BTC.
For analysts Willy Woo, it is now becoming increasingly clear that this giant is acting as the Bitcoin custodian.
“In case people are wondering why MicroStrategy is such a big holder. I think it is easier for public companies to buy MicroStrategy exchangeable debt for exposure to BTC than it is to hold the asset directly. MicroStrategy hodl BTC for several companies. “
diagram number Public Company BTC Holdings | Source: Willy Woo
Bitcoin price will break out ask for a favor golden cross?
diagram price BTC First Date | Source: TradingView
The daily chart shows some important things. First and foremost comes the potential golden cross. This summer, with the main focus on the death cross, the mood has developed particularly negatively and many traders are expecting a further decline in prices due to this structure.
However, since then the market has been on an uptrend as the moving average (MA) crossover is a trailing indicator. But even if a crossover does occur, it does not mean that the market is continuing to move in that direction.
Right now, the golden cross is a bullish signal, especially if Bitcoin is about to break above the moving averages. When this happens and the price rises above the MA, these levels can serve as new support for a much larger rally.
Important levels to watch
diagram price BTC 1 day | Source: TradingView
The market corrected deep a week ago when Bitcoin fell from $ 52,000 to $ 42,000. However, the price fell to a nice support level, creating a long wick. Such a long wick implies buying pressure and new support.
However, another volatile move took place last night when there was fake news of Litecoin’s partnership with Walmart. This initially caused the price to bounce around $ 2,000 in less than an hour, but then on news like. crashed to $ 3,000 Bitcoin magazine reported.
During such volatility, it is best to zoom out on the chart and test the market in the higher time frames, as these time frames will often give you an indication of the key levels required.
These key levels range between $ 42,800 and $ 44,000. As long as this area holds support, the price is more likely to continue rising. In other words, bearish divergence occurs with a sharp correction, but the worst could be over if the market holds above $ 42,800 to $ 44,000.
Hence, the Litecoin news caused some volatility, but the critical support at $ 42,800-44,000 is still there and that is the conclusion that should be held here.
On the downside, Bitcoin price has to break through USD 47,000 first as that is the current resistance. If successful, the price will continue to climb towards $ 50,000 and this could be the final hurdle before the ATH test.
Total market capitalization maintain important support
1-day total market cap chart | Source: TradingView
Total market capitalization shows that key support holds for the time being. As long as total market cap stays above $ 2 trillion, a surge to a new ATH is likely.
The slight difference to the Bitcoin price here is the total market capitalization that was tested in the ATH zone. If you test this ATH zone again, expect the value to go up, break out and hit a new ATH.
However, it will most likely generate new ATHs faster than Bitcoin, as altcoins far outperform Bitcoin.
Bullish divergence price and the falling wedge is underway
diagram price BTC 4 hours | Source: TradingView
The 4 hour chart is showing a potentially falling wedge structure that is likely to break to the upside. The key level to break through is at $ 47,000 as it has been a strong resistance since the recent correction.
Once Bitcoin crosses $ 47,000, it is very likely that the price will rise to $ 50,500 as there aren’t many possible rejections and the previous correction was vertical.
In summary, a falling wedge does not guarantee that Bitcoin will break through to the upside. But overall, if price hits a higher low around the $ 45,000 area, it will confirm a bullish divergence and possible breakout at $ 47,000. That is still a strong resistance to overcome.
On the other hand, the primary support to hold is the range between $ 42,800 and $ 44,000. If it fails, the next focus will be $ 38,500 to $ 40,000.
You can see the BTC price here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
According to AZCoin News