Bitcoin incurred some notable overnight volatility that favored the cryptocurrency’s bulls, which marks a resolution to the bout of sideways trading that it had been caught within at $9,600 in the time following the “flash crash” it faced last Wednesday.
This latest movement seems to have bolstered the crypto’s technical situation, which comes as BTC fast approaches its key weekly candle close.
One technical indicator that provides investors with insight into which direction an asset is heading next is now painting a bullish picture for BTC’s near-term price action, as its on-balance volume (OBV) is currently breaking above a long-held descending resistance line.
Bitcoin holds above key level as weekly close fast approaches
At the time of writing, Bitcoin is trading up just under 3% at its current price of $9,870, which marks a notable climb from daily lows of $9,550 and only a slight decline from highs of over $10,050.
Yesterday’s rally came about after the crypto had found itself caught within a bout of sideways trading in the time following its drop from highs of $10,200 to lows of $9,200.
The price action seen following Bitcoin’s “flash crash” seems to point to significant underlying strength amongst bulls, suggesting that the asset’s firm 2020 uptrend may be far from over.
BTC is currently just a handful of hours away from closing its weekly candle, which could set the tone for where it heads in the days and weeks ahead.
Big Chonis – a popular cryptocurrency trader and analyst – spoke about this weekly close in a recent tweet, telling his followers that a close above the crypto’s middle Bollinger Band would be “notable.”
“BTC currently holding above middle BB intraday… closing above would be notable.”
This indicator suggests BTC is in for major momentum
Chonis further explained that one technical indicator that suggests Bitcoin will soon see notable upside is BTC’s on-balance volume indicator, which is currently pushing above a descending resistance level that it has been caught beneath for several months.
“BTC – OBV poking above this respected falling resistance line.”
In essence, OBV is a momentum indicator that gives analysts insight into which direction an asset will trend based on its volume flow.
If this OBV breakout is sustainable and allows Bitcoin to post a bullish weekly close, it is highly probable that the crypto could see some significant upwards momentum in the coming days and weeks.
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