Bitcoin Holds Key Support But Remains Under Resistance
On Monday, Bitcoin (BTC) continued to move higher. As of the time of writing, the cryptocurrency is currently sitting at a valuation of $4,164, up 1.25% in the past 24 hours.
Per Josh Rager, an advisor to Blackwave and TokenBacon, this only cements the fact that Bitcoin is holding above its 200-week moving average (200 WMA), which has been an essential level of resistance for the asset since 2015. In fact, a number of analysts have looked to this line of support as an indicator of Bitcoin’s long-term health. Rager touches on this himself.
He writes that if BTC breaks under the 200 WMA, “new lows and a prolonged bear market” would likely be in the asset’s cards, underscoring the importance of that level. And he may have a point. Considering the fact that Bitcoin has held above this support for years, and at extremely important ‘make or break’ periods, like now, a foray under the level could deal a large blow to long-term believers.
However, taking Bitcoin’s recent price action into account, some are adamant that a continued move higher is more likely. But, Rager makes it clear that are continued rally isn’t likely to come easy. The 200-day moving average (200 DMA) — the spiritual successor of the 200 WMA, if you will — has been a foreboding presence in crypto markets since early-2018, as it has become an overarching level of resistance for Bitcoin. And in spite of BTC’s recent move above the auspicious $4,000 level, the 200 DMA still sets above, at a casual ~$4,500.
If history is any indicator, BTC will have immense trouble breaking past that level, unless there is an ample amount of buying pressure.
Bitcoin’s Move Higher Won’t Be Easy
Recent order book analysis done by Bleeding Crypto has confirmed that Bitcoin perpetuating the ongoing rally won’t exactly be an easy task. He explains that as it stands, there is an $80 million sell wall above BTC at $4,200. This, of course, is a sign that should make bulls wary. It accentuates that market whales aren’t exactly ready for a move higher, as such entites look to continue to depress the cryptocurrency market through foreboding sell orders.
And this sell wall, which recently resulted in a rejection of a $4,200 breakout, has led some traders to lean bearish for the time being. Crypto UB recently explained that with this market continuing to see “long lower wicks” with little follow through, coupled with decreasing buy orders heading into resistance at $4,200, he remains in a “day trade short position.”
In other words, unless Bitcoin sees an uptick in buying pressure shortly, a slight pullback could very well be in the cards.
Title Image Courtesy of Dmitry Moraine Via Unsplash