Bitcoin trading signal hints at an upcoming leap back above $30,000
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Bitcoin trading signal hints at an upcoming leap back above $30,000

Bitcoin trading signal hints at an upcoming leap back above $30,000

Bitcoin dropped about 1 per cent to $28,860 as of 10:42am on Thursday in Singapore

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Bitcoin’s rally this year is facing a test as the token struggles around $30,000.

A pattern buried in the coin’s recent swings suggests it could vault above that level again en route to a 7 per cent short-term gain.

The pattern is a minimum daily jump of 3 per cent followed by a next-day reversal of at least that magnitude during a generally bullish period for Bitcoin.

The token flashed that signal over Tuesday and Wednesday.

Bitcoin rose about 7 per cent on average over three, five and 10 days after the previous 17 such signals in the last five years, data analysed by Bloomberg show.

The study identified bullish periods by using the token’s relative strength index, a momentum gauge, which had to be above 50.

Bitcoin has rebounded about 74 per cent in 2023 from last year’s crypto rout, helped by expectations of an eventual loosening in monetary policy. But bets on Federal Reserve interest-rate cuts are cooling because of persistent inflation, which is sapping the revival in Bitcoin and other digital assets.

Bitcoin dropped about 1 per cent to $28,860 as of 10:42am on Thursday in Singapore.

Second-ranked Ether shed roughly 2 per cent, holding below $2,000. Smaller coins like Avalanche and meme token Dogecoin posted mixed performance.

The largest digital asset shed 3.9 per cent on Wednesday, a retreat that may have been caused in part by a “build-up in leverage which could have triggered a liquidation,” wrote Noelle Acheson, author of the “Crypto Is Macro Now” newsletter.

“This suggests that the drop is unlikely to be long-lasting, as recent support as well as derivatives positioning points to a bias to accumulate,” Acheson added.

Other analysts are a little more cautious given the challenging monetary policy outlook and other obstacles such as the US’s crypto crackdown.

“The scaling back of Fed rate cut expectations into the end of the year removes a pillar of recent support for Bitcoin,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note. “We continue to look for a test of support at $27,500 in coming sessions.”

Read: Build your own digital sovereignty over blockchains

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