Bitcoin (BTC), which topped $38,000 on Jan. 30, was still a “trappy weekend” that offered the possibility of a solid weekly close.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Bitcoin: “Choppy waters”
Cointelegraph Markets Pro and TradingView data showed that BTC/USD recovered the $38,000 mark, after hitting local highs of $38,740 via Bitstamp.
BTC’s strong performance “out of hours”, however, was not believed by many analysts to be a bullish play.
Michael van de Poppe, a Cointelegraph contributor, summarized the situation in his most recent Twitter update.
“I’m looking at $37K to determine if that holds. If not, I assume we will test lows for daily bullish diversification to create. If we hold, we may see a breaker over $38.5K. Weekend times -> boring/trappy.”
However, the highs continued to show what appears to be a slow return of form for BTC/USD daily timeframes following its sub-$33,000 lows earlier this week.
Bob Loukas was a trader, investor, and entrepreneur. His strength lay in the pair’s multiple closes that were above the 10-day moving mean (MA).
If you see two consecutive closes that are above the 10-dma of #bitcoin, it is likely that the lows are now (for a 60-day cycle). Perhaps it is possible to try to get back to the $35k range.
— Bob Loukas (@BobLoukas) January 29, 2022
However, it was still unlikely that the weekly close of $39,600 resistance would be achieved at the time this article was written.
“The crypto market is full breakout traders. How can you lure them during a weekend of low morale? “Force a move,” said Cantering Clark, a skeptical trader and analyst on Twitter.
Bulls are excited by RSI
Moving to on-chain data, Matthew Hyland, a popular analyst, revealed more bullish cues from BTC’s relative strengths indicator (RSI).
Related: What’s the deal with a blow-off top? Bitcoin hodler metric points to a ‘depressed” BTC price
RSI recently reached its highest “oversold” levels since March 2020’s Coronavirus crash.
This metric can be used to determine how much Bitcoin is “overbought” at a given price and how likely it is that a certain trend will continue.
RSI seems to be challenging a multi-month-old downtrend that has been in place since November, thanks to a modest rebound from the lows.
Hyland commented on Twitter that “the two previous breakouts in the past year have led to massive bullish movements,” and included a chart showing the action.
Bitcoin daily RSI vs. BTC/USD chart. Source: Matthew Hyland/Twitter