Bitcoin slows downs as it makes its way back from the high area of around $30,000. The top crypto by market cap still records profits over the past week (3%) but could re-test support at lower levels.
Related Reading | Bitcoin Bounces Back Past $40,000, But May Struggle To Maintain Position
At the time of writing, Bitcoin trades at $41,300 with sideways movement over the past day. The cryptocurrency continues to trade in a tight range but soon could see an increase in volatility.
Data from Material Indicators (MI) records short-term resistance as BTC’s price is above its current levels. There are over $5 million in asks orders from $41,300 to around $41,400. This could suppress the price from continuing its bullish momentum.
On the other side of the trade, there is major support for BTC’s price at $39,000. At these levels, the cryptocurrency records $9 million in bid orders with much more liquidity at lower levels. This suggests BTC could strongly rebound if it returns to that area.
A pseudonym trader recently pointed out that BTC’s price has seen constant rejection from the 200 Exponential Moving Average (EMA), a level often associated with trend direction for an asset. BTC’s current EMA stands at around $42,000.
In that sense, Bitcoin needs to break above that price point to continue upwards into further resistance. This potentially will be located at around $45,000, and $48,000. The latter stands as a major high timeframe for the cryptocurrency.
The pseudonym analyst is optimistic about BTC’s price capacity to break above its 200 EMA for the 4-hour chart.
$BTC Rejecting from the 4H 200EMA once again. As long as price can't get above that level at the very least, we'll be stuck in this down trend.
The 200EMA is still trending down as well though so eventually a break is imminent.
— Daan Crypto Trades (@DaanCrypto) April 20, 2022
As NewsBTC reported, Bitcoin records a decrease in its 90-day implied volatility. This metric stands at its November 2020 low, according to data from Arcane Research. At that time, the decrease in volatility and BTC’s long period of consolidation preceded a major rally into its current all-time high levels.
Why A Weakening U.S. Dollar Could Push Bitcoin Upwards
BTC bulls seem to be displaying more strength. The liquidity sitting lower at $30,000 appears to have moved up which leads to faster BTC price bounces. This contributes to the bullish thesis for the cryptocurrency as it could be preparing for an imminent break of short to mid-term resistance.
On the latter, analyst David Ellis said:
(…) I’ve been staring at the charts for long stretches of time the past week-plus. I haven’t seen dips getting bought up this aggressively since Q4 2020. Again, WAY too early to get too excited, but this is an encouraging sign IMO.
The U.S. dollar has been rallying on the back of an increase in interest rates from the U.S. Federal Reserve. Bitcoin is negatively correlated to the currency, as Arcane Research found. This could suggest more upside potential for the digital asset.