BTC/USD Surges, Temporary Bottom In Place
Mohaimenul Jowarder | Jul 24, 2018 01:55PM ET
The price of BTC/USD smashed into the ground after it hit a critical resistance level at 19851.6. The dramatic fall from its record high is often considered as the burst of the bubble. The pair found some decent buying pressure near the critical support level at 5913.8. From that level, it started its bullish rally but eventually the sellers took control of this market after it hit the critical resistance level at 9980.3. Most of the professional BTC/USD traders executed short orders at that level and made a decent profit by riding the bearish rally of this pair, which eventually found some support at 5913.8 and formed a nice bullish reversal candlestick pattern. The aggressive traders went long with the bullish price action confirmation signal but the conservative traders are still waiting in the sideline for a minor pullback to enter long.
Figure: BTC/USD Bouncing Off A Major Support Level
From the above figure, you can clearly see the support level at 5782.6, which has provided some fresh buying pressure for this pair. The bulls have managed to form nice higher lows in the daily chart, which clearly represents the weakness of the bears. Currently, the price is slowly heading toward the major resistance level at 8504.6. From that level, sellers might try to take control of this market but a daily closing price above that resistance will confirm the establishment of a medium-term bottom formation at 5782.6.
Though BTC/USD slipped lower significantly professional traders are considering this downfall as a deep price correction. According to leading cryptocurrency investors, buying BTC/USD at this deep discount might provide solid profit taking in the near future. But traders are advised to look for bullish price action confirmation before executing any long orders since it will dramatically reduce risk factors. If the price rallies toward major resistance at 9914.8, we might see some extensive selling pressure. This level will act as an initial profit-taking zone for aggressive traders so we might see some bearish price retracement. However, a clear break of major resistance at 9914.8 will turn the overall bias of the BTC/USD strongly bullish.
The U.S dollar index, which measures the overall value of the greenback's strength against six major rivals is still in its recovery phase. Moreover, FED officials have failed to hint at its next rate hike, which clearly represents a prolonged recession period in the U.S economy. Fundamentally, bitcoin sentiment is still bullish and investors are expecting a strong recovery attempt from crypto bulls. On the contrary, the rising demand of cryptocurrency is most likely to push the price significantly higher in the near future. Considering the technical and fundamental parameters, the overall bias for the BTC/USD pair remains bullish.
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