Bitcoin Prepares to Revisit $32,000 Support Level Before Retracing the Bull Market
Bitcoin may see a decline in search for a support barrier that may kick-start a rally.
Bitcoin was up by 1.04% and trading at $34,716 over the last 24 hours. The leading cryptocurrency with a trading volume of $26,216,108,824, and its market capitalization stands at $651,330,922,635.
Over the weekend, buyers were active and supported a near 6% price up that stalled near the $36,00 resistance level. However, that seems to have changed by now.
The relative strength index (RSI) on the four-hour chart stands at 53.29, and this signals that the trend is bull territory. The presence of the Doji candlestick shows that the buyers and sellers have tried to steer the price in a particular direction. Still, there is no overweight, thus indicating indecision by the market players.
The price of the leading cryptocurrency appears to be in a consolidation phase (sideways phase) as the sellers and buyers are in equilibrium. However, the presence of a small head-and-weak shoulders signal that there is the likelihood of increasing interest in selling and that the current buyers’ dominance may soon lose interest.
This is affirmed by the presence of the death cross formed by Bitcoin as indicated by the 50-day moving average crossing below the 200-day moving average, which signals a bull trend switching to a bear trend, and thus shows that the original cryptocurrency is likely to move toward the $32,000 support level. This is further confirmed by the MACD lines that appear to converge at the 0-level and try to move downwards, thus showing a change in the trend structure, signalling a new downward trend is likely.
The return to backwardation is likely, signalling a bear market, which may see Bitcoin taking a rest at the $32,000 support level before retracing its way. Public criticisms of the flagship cryptocurrency’s energy needs by Billionaire Elon Musk and regulatory crackdown worldwide (not just in China) are among obstacles.
Last month, the UK’s Financial Conduct Authority banned Binance affiliate, which operates in the country, from offering any traditional financial services that fall into the regulator’s remit. Last week, the Cayman Islands Monetary Authority stated that Binance was not authorised to operate a cryptocurrency exchange in the nation.
However, the thesis of a bear market trend may be invalidated if there is no selling interest and that the buyers can quickly drive the price up towards the $36,000 resistance level.
Image source: Shutterstock
