Over the last few months, the king coin’s movement has come under much deliberation. A recovery from late July lows identified the end of a bear cycle but a series of flash crashes during September allowed FUD to settle in the market once again.
Bitcoin was quick to shrug past these uncertainties after witnessing a rebound from $40,560 during end-September – a development which set a strong rally in motion.
Overall, BTC was trading at a 100% premium compared to its July lows and was expected to maintain a bullish long term narrative moving forward. However, overbought readings on the RSI and a weakening MACD raised a few questions marks surrounding BTC’s near-term trajectory.
A slight pullback at $56,000 would allow BTC to overcome these signals and target the next leg upwards.
BTC Daily Chart
Source: BTC/USD, TradingView
The Pitchfork tool was applied on BTC’s July low and its subsequent retracement in September to identify near-term target areas. According to the tool, BTC’s next point on contact would be $60,000 after registering a daily close above $58,400.
However, this could allow investors to cash out on BTC’s present bull run at a viable take-profit zone. As a result, BTC could see a comeback towards the median line of the Pitchfork close to $56,000 before embarking on the next upcycle.
If the median line is conceded to the bears, near-term support can be offered at $53,000 and $51,000 respectively. On the other hand, a close below $44,000, although unlikely, would severely hamper BTC’s bullish structure.
Reasoning
Now BTC’s daily RSI has traded within overbought levels over the past week and needed to stabilize. This would be healthy over the longer run and selling positions get flushed out while new longs are initiated in the market. A closer look at the MACD suggested that momentum was slowing down as the index approached a bearish crossover.
Conclusion
A minor retracement was expected for BTC before the next leg above $60,000. Focus should be on near-term support levels of $56,000 and $53,000 when the next wave of selling pressure hits the market.
