Bitcoin’s long-awaited breakout from a consolidation channel could be a setup for a rally to $40,000, which would be a major reversal signal for digital gold, which is in a downtrend since last November. At the time of writing, the Bitcoin price is changing hands at $31,625.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price broke through important resistance, and now aims at $40,000
According to the daily chart, Bitcoin successfully bounced off the June 2021 support, became the cornerstone of its rally to nearly $70,000, and is currently trading around $32,000. The daily chart shows no resistance ahead except for those formed by technical indicators like moving averages.
The first MA resistance line that BTC needs to break is the 50-day resistance line, which acts as a guide for both uptrends and downtrends. Breakouts usually indicate a trend reversal for an asset moving in either direction. As for Bitcoin, traders and investors have yet to start investing heavily in digital gold as it is under heavy selling pressure after losing more than 24% of its price a few days back at the beginning of May.
In longer timeframes like weekly or monthly, Bitcoin has also risen from the 200-week moving average. The recovery does not mean that BTC will enter a long-term uptrend, but at the same time, it does not fall below the mentioned support level in its modern history.
Trading volume this week remains well below average with 3,800 BTC traded on exchanges like Bitstamp, while the average is typically well above 10,000. Ethereum and other altcoins are also showing neutral performance today after a strong rally yesterday. According to the report, the market is waiting for the opening of the US stock market.
Read more:
- Bitcoin Closes 9 Red Candles Weekly – Altcoins Turn Green But Not Enough To Recover Losses
- After Completing Record Ninth-Straight Weekly Decline, Bitcoin Price Jumped By The Most Since Early March