Bitcoin has been living very volatile hours, after a crash dragged the price to $ 28,840 in a matter of hours, however now we see how it recovers at great speed, trading at the time of writing at $ 34,627.
The fall that occurred last Monday was predicted by many, due to the lack of buying determination. The latest trigger was China’s new retaliation with Bitcoin mining.
However, at the same time we saw very positive news. It was the purchase of 13,005 BTC by MicroStrategy at an average cost per coin of $ 37,616. The total purchase was about $ 489 million.
It is clear that fear is a more volatile catalyst than hope, especially when we are at such high price levels with a rally that never seemed to resume.
Chain data does not paint a very encouraging picture
The signals from the on-chain data are not entirely positive. Ki Young Ju for example warned last Wednesday, as the decline deepened, that the amount of whale deposits in exchanges was increasing rapidly, which is generally taken as a sign of the beginning of a bear market.
However, other data such as those reported by @glassnodealerts, indicate that we are more inclined towards a period of low activity, rather than extreme negativity.
The volume of miner departures fell to a 6-month low, while the amount of active supply reached a 7-month low. Both data speak of a lower circulating supply, but also of the little activity of the network.
The current situation is a bit difficult to forecast in the short term, and it will only be more clearly defined when a good directional move occurs.
However, those who have their sights set on the long term seem to be very clear about things, investing in a currency with a predetermined maximum supply given a well-inflationary economic outlook.
To discover the key levels that we should take into account for the price of Bitcoin, he then performed a technical analysis of it.
Bitcoin recovers from crash invalidating almost all bearish intention
In the daily time frame of the BTC vs USDT chart, we note how even though the fall of the previous year accentuated a clear bearish direction in the very short term, really if we look a little to the left we see that it is nothing more than an excess of volatility quickly wrapped.
After reaching support at $ 28,850, BTC left a strong rejection of bearish intentions, kicking off a broader recovery.
The support at 30k, which we have been saying is the most important to maintain, is still intact, which means that the price is still on a fairly wide side.
In the event that support is lost, the ground will be clear to $ 26,281.
To think about a bullish resumption, resistance at $ 40,500 must be broken.
Weekly chart technical analysis
It is clear that we are looking at a short-term bearish intention that continues to cause problems.
In the weekly candle chart we see how this direction has been dragging the price down continuously during the last months.
However, after reaching that support near $ 30,000, we saw that intention slow down, and now the new range of the area has once again shown seller exhaustion, which may well be taken as a bullish signal.
The previous big uptrend is still from my point of view, what we should follow. We are continually seeing negative intentions quickly being absorbed, to show today the price of Bitcoin as it recovers from the crash.
There is still clear downside risk in the very short term, and for it to be removed, the resistance at $ 40,500 must be broken.
Bitcoin price recovers quickly after sudden crash Source: TradingView.
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