Let’s examine the insights shared by our Technical Analyst at UseTheBitcoin as he walks us through his personal trading approach and observations on the crypto market.
Bitcoin (BTC) Market Update
If you’ve been watching the market closely, you’ll see that Bitcoin is still trending downward. Currently, it seems to be heading towards the $72,000 to $75,000 range. However, if you take a look at the Relative Strength Index (RSI), you’ll notice an interesting signal—there’s a presence of a bullish divergence.
What does this mean? While Bitcoin’s price is going down, the RSI is starting to move upward. This pattern suggests that Bitcoin could be preparing for a shift in momentum. Right now, we’re in a downward trend, but this divergence indicates a possible reversal to an upward trend. Of course, this won’t happen overnight, but the bottom may be much closer than we think.
Bullish divergence occurs when the price of an asset is making lower lows, while the RSI is making higher lows. This signals that selling pressure is weakening and that buyers may soon take control. In past market cycles, similar divergences have preceded significant price recoveries. Traders often use this as an early sign to start accumulating before a potential rally begins. However, patience is key because confirmation of a trend reversal usually requires additional bullish signals, such as increased volume or a breakout above key resistance levels.
Now, let’s analyze Bitcoin’s movement on a larger timeframe. If we switch to the one-week chart and apply moving averages, we can see that Bitcoin is currently sitting at two key levels: the blue line, which represents the 100-day moving average (MA100), and the orange line, which represents the 200-day moving average (MA200).
Historically, these levels have acted as strong support zones. Every time Bitcoin touched these moving averages in previous cycles, a significant price pump followed. If you look at past price movements, you’ll see that Bitcoin rebounded whenever it reached these critical areas. Many traders and investors are now closely watching to see if history will repeat itself.
Looking back at previous bull and bear cycles, Bitcoin has often tested the 100-day and 200-day moving averages before launching into a new uptrend. In 2020, for example, Bitcoin touched these moving averages before entering an extended rally that eventually led to new all-time highs. Even during the 2018 bear market, Bitcoin found support near these levels before starting a slow but steady recovery.
The reason moving averages like the MA100 and MA200 are so important is that they act as dynamic support and resistance levels. Many institutional traders and long-term investors monitor these levels to identify potential buying opportunities. When Bitcoin reaches these key moving averages, it often attracts buying interest from those who believe in the asset’s long-term value.
Because of this, a lot of people believe that Bitcoin is nearing its bottom and could soon experience a major bounce. However, market cycles are never identical, and while history often provides clues, it does not guarantee the exact same outcome. This is why traders also look for other confirming indicators, such as RSI patterns, volume trends, and macroeconomic conditions, to strengthen their analysis.
Final Thoughts
So, what’s the best move right now? If you’re looking to enter the market, it’s a good idea to prepare for these levels. Keep an eye on Bitcoin’s movements and be ready to take action when the right moment comes. Dollar-cost averaging (DCA) might be a solid strategy to mitigate risk while securing a position before the next big move. The market tends to move fast, and having a well-thought-out plan can make all the difference.
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