Bitcoin’s path to $60k: Why BTC just found support at $46k
After crashing from $46k to $43k on Sunday, the bitcoin price managed to hold on to critical support at $46,000.
Breakdown of bitcoin’s price action
Down 20% from the all-time high reached earlier this month, Bitcoin is in correction territory – a sharp reversal from an almost uninterrupted bull market.
With a Relative Strength Index (RSI) of 45, Bitcoin appears oversold – a signal that it certainly has more upside potential in the near term.
The Commodity Channel Index (CCI), another short-term valuation metric that can be used in conjunction with the RSI, suggests that Bitcoin Supersplit is leaving the heavily oversold area at $43k and is at the start of a new uptrend.
BTC continues to touch the lower boundary of its Bollinger Bands on the daily time frame – a strong bullish signal indicating that the asset is heavily oversold. However, the previous candle closed above the Bollinger Band on the weekly time frame, which is interpreted as a neutral or slightly bearish signal for Bitcoin.
Just below the weekly pivot point of $46.2K, Bitcoin appears to be potentially on the verge of a breakout and investors should closely monitor Bitcoin’s price action if it is able to recapture this price level.
Another important pivot point to watch out for is $52K. If Bitcoin (Go to buy bitcoins by instant transfer guide) manages to break through this, a further price rise is likely to take place.
There are good reasons
On a fundamental level, analysts and investors are concerned about a repeat of the big correction of 2018 – but there are good reasons that this is relatively unlikely. Philip Swift, a cryptocurrency analyst, points out the following in this regard:
„The Spent Output Profit Ratio (SOPR) has now been reset (green on the chart), meaning that wallets that sell are now selling at a loss. This is a strong „buy the dip“ signal in a bull market. Combined with the derivative financing resetting, this is bullish.“
With any asset, a pullback is expected within a short period of time in such a heated market – the 2017 rally was marked by pullbacks to price levels of 15-25% before the $20,000 mark was breached.
With Bitcoin’s fundamentals („Bitcoin analyst sees „aggressive“ bull run towards $64,000″) improving significantly in terms of mainstream adoption and institutional usage, analysts are optimistic that this recent pullback will not last long.
With technical indicators on a weekly and daily basis suggesting that it is oversold, now could be an essential time for traders to consider the asset’s considerable upside potential.
But high volatility in the market caused by political decisions such as in Nigeria and the Federal Reserve’s comments could cause Bitcoin to deviate from its technical indicators and fall to even lower support levels.