Bitcoin (BTC), which was then $37,000, was spotted by Wall Street traders on Jan. 28, as they waited for a resistance test.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
BTC passes major resistance test
TradingView and Cointelegraph Markets Pro data showed that BTC/USD returned to their former form after it fell to $36,175 on Bitstamp earlier today.
In keeping with the range-bound behavior, there were high hopes that momentum would continue challenging resistance levels closer to $40,000 regardless of whether or not a new correction would occur.
Crypto Ed, a popular trader and commentator on the immediate outlook said that the bearish scenario seemed most likely.
“I’ll only be fully bull if I get a convincing reclaim for $40K.”
Analyst and fellow trader Anbessa repeated previous demands for $38,500 in order to declare the corrective phase for Bitcoin complete.
Cointelegraph reported that low funding rates have been paired with an improving picture in derivative markets. This could lead to a quick squeeze upward.
#BTC has re-entered the $28000-$38000 consolidation range BTC last consolidated in this range in Q1 and Q2 of 2021 Naturally, on this latest recovery, the Range High (red) will be the main resistance to beat to confirm further upside$BTC #Crypto #Bitcoin pic.twitter.com/aojF2Zcm0y
Rekt Capital (@rektcapital), January 25, 2022
Rekt Capital, Jan. 24, highlighted the potential for Bitcoin to be reclaimed to rekindle bearishness over longer timeframes. This would be in the form $39,600 per week as a close price, according to Rekt Capital.
“Similar vibes” to early 2018.
Crypto Ed was not the only one who felt foreboding about a new breakdown.
Related: Bitcoin panic selling causes losses in 2022
Although Bitcoin took liquidity during the brief dip below $33,000 earlier this week, it hasn’t convinced everyone that the floor really is in.
TXMC Trades, a Twitter analyst, stated that the spot price of BTC/USD should be lower than it is now. The theory seems to be supported by history.
He argued that it was wrong for BTC to bleed from the ATH without a relief rally and only to have the reversal occur front-run without adequately testing the range low.
“Similar vibes from April 2018, where the $6K bounce had been front-run but eventually collapsed. It’s all gut feeling.
TXMC noted, however, that the bounce from $33,000 had dissolved more short positions than any time since Bitcoin’s $69,000 all time highs in November. This was citing data from Glassnode.
Annotated chart of Bitcoin futures short liquidations Source: TXMC Trades/Twitter