After the correction, the Bitcoin chart finally turns green again, with the price of the largest cryptocurrency currently hovering around $28,700. Major price levels reappear.
In this analysis, I discuss why Bitcoin reached a local bottom around $27,000 and is currently rising. This has everything to do with the 50-day simple moving average (SMA), an indicator that usually acts as resistance or support.
Why is bitcoin rising here?
The simple answer is that the price of Bitcoin is rising here simply because of horizontal support from past price movements. However, this is not the only reason. The price also received support from the 50-day Simple Moving Average (SMA), as mentioned in the introduction.
This is an indicator that adds up the last 50 daily bitcoin closes and calculates the average. This creates a line that can play an important role as support or resistance.
An increase was to be expected and there was. But where will the price catch its breath? I am convinced that we have reached that point.
The $28,600 resistance is important
You may be wondering why the $28,600 is relevant since the current price is already at $28,730. This has everything to do with closing the candles. Only if a 4-hour candle closes above the $28,600 resistance can it be considered a breakout.
And preferably not one candle, but several candles at the same time, so that there is no counterfeiting…
The chart above shows that Bitcoin has yet to close a candle above the $28,600 price level. Therefore, we have to wait for the next close of the candle. If the price closes above this level, it is bullish. If the price closes lower, it will likely signal another correction. It’s that simple!
The dollar is collapsing
The chart below shows that dollar price action can be divided into three segments. If the price rises above the red line, it is very favorable for the Dollar and therefore unfavorable for Bitcoin due to the inverse correlation.
However, if the price falls below the green line, it will have a positive effect on the cryptocurrency market and prices will rise.
The strength of the dollar is approaching the green line on the chart and therefore the coming days and weeks will be crucial in determining whether the dollar continues to find support here or whether the dollar has run out.
Source: Btc Direct
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
