Bitcoin can cross the $ 7,000 zone but the $ 8,000 zone will be a lot harder








Bitcoin is trading at $ 6,806, marking an impressive increase of more than 10% from the recent low created on April 1. Yesterday evening, there was a time when Bitcoin rose to $ 7,273. This resulted in the $ 61 million short BTC team being liquidated on BitMEX, according to data provided by Datamish.


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In the past few days, when looking at the performance of other major altcoins, Ether and XRP have been performing worse than Bitcoin. Bitcoin dominance is still at 65.5%.


Bitcoin monthly chart


Bitcoin ended March with a bearish candle and closed below the 20-month MA, representing the first close below $ 6,500 in 11 months. The trading volume in March led Bitcoin to print the second highest monthly volume of all time on Coinbase, only slightly lower than December 2017 when Bitcoin reached $ 20,000.


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Monthly BTC / USD chart | Source: TradingView


The total volume created after Bitcoin witnessed selling pressure has peaked in the past 18 months, but there was a major rejection at the VPVR control point, the price area where Bitcoin bottomed out in the bear market in 2018. (yellow horizontal line).


The next highest volume button is the price area where the bulls and the bears are currently fighting. In the past, Bitcoin has never traded in the region of $ 4,000 to $ 6,500 for a long time. Although the price is in a downtrend, a strong decline at $ 4,000 is encouraging because it shows that the bulls are buying dip every time the price drops to this zone.


The RSI is now at 49, which is a neutral level showing the siedway for the price.


Weekly Bitcoin chart


The weekly chart shows that BTC price is trading below the resistance line of the bearish channel formed since July 2019, and is currently sitting at $ 6,800. This line was crossed in the bull run that happened earlier this year, but the sharp decline in March brought prices back to the channel, and it is now acting as a strong resistance for prices.


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Weekly BTC / USD chart | Source: TradingView


The 200-week moving average is defined as support when very few price action is occurring below it for any period of time, indicating strong demand each time the price drops below this line. The 20-week and 100-week MA lines can provide strong resistance for Bitcoin bulls because they have historically been very important support and resistance levels that determine the bullish or bearish nature of the market.


Since the beginning of the year, the Volume Weighted Average Price (VWAP), the average price of the year, has a weighted weight for the volume at $ 7,100, where the 100-week MA is also staying. This implies that a inflection point will be formed at this price zone.


Overall, the 200 moving averages (at $ 5,588) and 100 (at $ 7,095) are ordering Bitcoin's support and resistance, currently the bulls are attacking this resistance.


Buying volume is decreasing gradually whenever the price increases higher. This is a bearish signal, as it shows that the bulls are losing momentum, but it should be noted that the recent volume is much higher than normal.


The Chaikin money flow oscillator, looking at the volume of Money Flow over the past 20 weeks, shows an increase in divergence in volume, which shows that buying pressure has increased.


4-hour chart


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BTC / USD chart with 4-hour frame | Source: TradingView


The 4-hour Bitcoin price chart shows a series of higher lows that show the short-term uptrend. In addition, there is a failed head and shoulders pattern in this chart, which is another sign that the bulls are controlling the current sideway.


CMF has turned positive, which is a good short-term signal for the bulls. The Stoch RSI indicator is indicating that Bitcoin has been overbought in lower time frames.


CME & future data


CME has published a behavior report of investors, which summarizes the net positions of traders of different sizes to determine the general direction of each portfolio.


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Large traders or institutional traders are illustrated with a red line on the chart and it's easy to see that they are always short of Bitcoin, and have doubled their short positions by 2020 in between $ 8,200 and $ 10,700. The chart shows that they only close the position after the price drops from $ 8,000 to $ 4,000.


This is very important because it gives low buying pressure on the CME when short positions with large sizes close positions. Small and professional traders also contributed a big part in the recent sell-offs, when panic took place in the market making prices fall faster.


Therefore, we can assume that organizations will be interested in short positions in similar positions from $ 8,200 and up. This is also consistent with the resistance provided by the weekly MA lines, and this is also where the annual spindle stays.


Therefore, CME data will be a useful tool to track the behavior of large organizations if Bitcoin can reach $ 8,000.


Look forward


Bitcoin is showing signs of a rally when selling pressure weakens when the price hits the 200-week MA line at $ 5,588. However, any price increase will be hampered at around $ 8K due to the confluence of technical resistance and the short of institutional investors.


The first sign of a rally is that the bulls have regained the 100-week MA and turned it into support. However, if the price falls from the current price or from the overhead resistance, then the 200-week MA will be the first line of defense for Bitcoin.


You can see the price of BTC here.


Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.


Sn_Nour


According to Cointelegraph




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