Bitcoin’s tight consolidation near $25,000 suggests that bulls are holding on to their positions in anticipa
Bitcoin’s tight consolidation near $25,000 suggests that bulls are holding on to their positions in anticipation of a breakout to a new 2023 high.
Bitcoin (BTC) rose more than 11% last week and is trading near the pivotal resistance at $25,000. Monitoring resource Material Indicators highlighted in its latest update that large volume traders were “thinning” overhead resistance, which could spark a rally. As the prices rise, retail traders may get sucked in and the whales could use this opportunity to sell their positions that were accumulated at lower levels.
Every uptrend witnesses several pullbacks and Bitcoin is no exception. However, the price action of the past several months shows a large basing pattern, which may be about to break out to the upside. If that happens, Bitcoin will signal a potential trend change.
There are very few occasions when all the indicators turn bullish. If traders keep waiting for that to happen, they may miss a large portion of the rally. Therefore, it is better to watch the price action closely and trade according to the individual’s money management principles. Usually, successful strategies are simple and easy to follow.
Could Bitcoin and select altcoins continue to outperform the United States equities markets in the near term? Let’s study the charts to find out.
SPX
The S&P 500 index (SPX) bounced off the 20-day exponential moving average (4,080) on Feb. 10 but the bulls could not push the price to the overhead resistance at 4,200. This emboldened the bears who pulled the price below the 20-day EMA on Feb. 17. A minor positive for the bulls is that lower levels attracted strong buying as seen from the long tail on the day’s candlestick.
The 20-day EMA is flattening out and the relative strength index (RSI) is near the midpoint, suggesting a few days of consolidation. The index could swing between the uptrend line and 4,200 for some time.
Trading inside a range is generally volatile and random. If bulls thrust the price above 4,200, the index could resume its up-move. There is resistance at 4,300 but if bulls do not allow the price to dip back below 4,200 during the next correction, the index may rally to 4,500.
Contrary to this assumption, if the price turns down and plummets below the uptrend line, the index may tumble to 3,764.
DXY
The U.S. dollar index (DXY) broke and closed above the wedge pattern on Feb. 16. The moving averages are about to complete a bullish crossover and the RSI is near 57, indicating that bulls are trying to make a comeback.
However, the bears are unlikely to give up easily. They will try to pull the price back below the moving averages and trap the aggressive bulls. If they do that, the index could first slip to 102.58 and thereafter to 101.29.
Conversely, if bulls do not allow the price to break below the moving averages, it will suggest that dips are being purchased. The index may then start a relief rally to the 38.2% Fibonacci retracement level of 105.52 and thereafter to the 50% retracement level of 106.98.
BTC/USDT
Bitcoin has been trading near the strong overhead resistance at $25,211 for the past four days. Although the bears have defended the level successfully, the bulls have not given up. They again jumped on the opportunity on Feb. 20 and purchased at lower levels.
Generally, a consolidation near a strong overhead resistance breaks out to the upside. The rising moving averages and the RSI above 65 also indicate that bulls are in control. If the price breaks and sustains above $25,250, the BTC/USDT pair could pick up momentum. There is no major resistance until $31,000, hence this journey could be covered in a short time.
The first support is at the 20-day EMA ($23,218) and then at $22,800. Sellers will have to quickly drag the price below this support to weaken the bullish momentum. The pair could then tumble to $21,480.
ETH/USDT
Buyers pushed Ether (ETH) above the overhead resistance of $1,680 on Feb. 17 and thwarted attempts by the bears to pull the price back below the breakout level.
The upsloping moving averages and the RSI in the positive zone indicate that the path of least resistance is to the upside. The ETH/USDT pair could first rise to $1,800 and then continue its journey toward the next resistance at $2,000. Sellers are expected to fiercely defend the zone between $2,000 and $2,200.
This bullish view could invalidate in the near term if the price turns down from the current level and breaks below $1.460. The pair may then slump to the strong support at $1,352.
BNB/USDT
Sellers are trying to defend the $318 resistance but the bulls have not allowed BNB’s (BNB) price to sustain below the moving averages. This suggests that lower levels are attracting buyers.
