All eyes now on Bitcoin’s former psychological resistance of $10,000 and whether it becomes a key level of support.
Bulls are likely buyers here, anticipating Bitcoin’s price to hold above its 200-day exponential moving average (EMA) and the important psychological level of $10,000 at the bottom of the blue support zone.
Bears may be anticipating a more protracted correction now, with the 14-day RSI having broken below its key bull market support zone between 45 and 50. This can indicate to some traders that a leg of a trend is concluding and transitioning into a consolidation. As a result, some less bullish traders might be shorting strength in anticipation of more volatile sideways-ranging price action.
Traders will also note the clear downtrend forming on the 14-day RSI. A breakout of this trendline may signal to bulls that the next leg up is imminent.
Finally, of particular importance to traders is whether $10,000 can hold up as a level of support. In a healthy uptrend, strong resistance will turn into strong support as price moves higher. For most of 2020, $10,000 was an impenetrable ceiling for Bitcoin’s price. Therefore, traders will be closely watching to see if we can hold our breakout of this key level, or whether we dip below and consolidate under it once again.
That’s it from me today. You can catch me on twitter at @savdoescrypto.
Until next time, stay awesome.
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