A closely tracked crypto analyst is mapping out a potential scenario for Bitcoin (BTC) to trap bears and rally above $30,000.
In a new strategy session, pseudonymous analyst Cred says that while Bitcoin still looks bearish, he sees a setup where BTC ignites a “meaningful” rally.
“At its simplest, what this would look like is a weekly close back above the 200-week moving average, which is at around $22,000 or thereabouts. Should that happen, all this activity [below $22,000] – all the selling, fresh positioning, existing positioning, whatever you want to call it – will be offside.
I think that would set up for a visible, meaningful reversion higher. And by visible and meaningful, I mean even just a few weeks of green candles.
There has been absolutely zero relief in this entire downtrend.”
According to Cred, Bitcoin has nosedived from $48,000 to $17,000 over the last few weeks with incredible bearish momentum. However, he says the recovery of the 200-week moving average at $22,000 could abruptly swing the momentum in favor of BTC bulls.
“The weekly timeframe is in area of support, as you can tell by trading the $20,000 handle. The weekly close hasn’t been terribly constructive below support [200-week moving average], which at face value is bearish. If it is going to be bullish, we need a weekly close above this level [$22,000] to mark this price action as a failed breakdown, and then we can aim for a reversion higher…
What would the target for that be? I think to some extent it would require retracing much of the selling that took us here – a lot of this one-sided inefficient price action. On the weekly timeframe, my eye is drawn towards as far as it may seem at least the previous range low, broken support, turned resistance at $32,000.”
At time of writing, Bitcoin is changing hands for $21,310, a little over 3% away from reclaiming the 200-week moving average.
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