Bitcoin begins the initial recovery phases after holding onto the 50-day SMA support.
BTC must break above the resistance at $32,000 and the ascending channel’s upper boundary to validate the upswing.
Bitcoin continued with the foreseen breakdown after losing support at $31,000. The bearish leg explored levels slightly under $30,000 but buyers were very keen on limiting the downward movements.
Meanwhile, the flagship cryptocurrency is trading above $30,000 amid the push by the bulls for gains heading back to $40,000. The immediate downside has been protected by the 50-day Simple Moving Average.
However, Bitcoin is also facing a critical resistance brought about by the ascending parallel channel’s middle boundary. Confirmed price action above this zone is likely to add credibility to the bullish outlook.
Simultaneously, the gap made by the 50-day SMA above the 100 SMA and 200 SMA suggests that buyers have the upper hand. A couple of key levels must come down for BTC to jumpstart the rally back to $40,000, the channel’s upper boundary and seller congestion at $32,000.
BTC/USD daily chart
On breaking above $32,000, more investors will be attracted to the market and are likely to respond by increasing their positions in BTC. This will create a strong tailwind behind Bitcoin, perhaps enough to shatter the hurdle at $36,000.
On the other hand, it is worth noticing that the Moving Average Convergence Divergence still reinforces the downtrend. The MACD tracks the direction of an asset’s trend and its momentum. For now, the MACD line is still below the signal line suggesting that recovery may take a while to shape.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com