In spite of the fact that the Bitcoin ship has been steadying recently, the market has been setting itself for the next major swing.
It is likely that a falling channel, the daily 200-SMA (green), and EMA Ribbons will play out in the buyers’ favour. Additionally, an uptick in Whale activity indicated a resurgence of trust in the Bitcoin market, which may have laid the groundwork for an upcoming rebound.
BTC was trading at $47,223 at the time of writing, an increase of 0.55 percent over the previous 24 hours.
On the 4-hour chart of Bitcoin, descending channels are extremely popular. Since August, BTC has formed four of these patterns, with the price of the cryptocurrency increasing on each time.
When used in conjunction with the EMA Ribbons, the channels can be utilized to detect crucial price points that signal the onset of an upward swing. A similar situation existed at the time of publication, with the cryptocurrency trading towards the lower end of these Moving Averages.
On the daily chart, Bitcoin appeared to be very close to its 200-day simple moving average (SMA), which could signal the beginning of a new round of buying pressure. In the event of a reversal, Bitcoin is expected to comfortably climb over the swing high of $56,600 reached on August 23.
Following that, levels such as $60,000 and $64,000 would be pursued. Sellers would need to aim for a close that is less than $44,000 in order to avoid such a scenario.
Not only did Bitcoin trade in an important price range, but so did its relative strength index (RSI). The relative strength index (RSI) recovered from the support level of 40, which resulted in a 12 percent price increase when bitcoin created its last downward channel.
As shown by the MACD, some buying pressure had already begun to have its influence on the market. The histogram indicated that downward pressure was waning and that the market was poised for a bullish crossover.
While it appears that the aforementioned indications were favourable, it is crucial to remember that these indicators were still trading below their respective half-lines at the time of writing.
With Bitcoin breaking north of its declining channel, it is projected to spark another market rally, ideally over $50,600 per Bitcoin unit. Whales have laid the groundwork for such a move, and it is only a matter of time before merchants join in on the festivities.
While the market is still susceptible to a further decline towards $46,000, traders would be well advised to take advantage of this opportunity to buy.