The past two months have seen Bitcoin in a constant battle with the shackles of its 20 Exponential Moving Average since bears secured a renewed selling strength around the $47.5K mark late in March. Though the short-term outlook showed sideways actions, Bitcoin HODLers remained alert to defend the 16-month-long foothold at the $28.8K level.
However, the leading crypto maintained slugging moves in a constricted phase due to the obstacle confluence near the $30.8K mark. Any facets worsening market sentiment would see a closing beneath the current setup offering a shorting opportunity.
While publishing this content, Bitcoin traded at $31.481.2, following a 2.49% increase. Moreover, the leading altcoin stayed 7.41% up over the previous week (Coinmarketcap data).
Bitcoin 1Day Timeframe
Considering BTC stemmed from a long-term pessimistic bias, the altcoin might remain within the constricted range at $28.8K – $30.8K in the upcoming sessions. The leading crypto created a rectangle on the lower timeframes and daily chart within the past three weeks. Such cases had the Bollinger Bands entering a squeeze phase.
Bitcoin might drop to the $30.8K level as the BB upper band matched the 23.6% FIB mark and the 20 Exponential Moving Average. Nevertheless, the price action stayed around the BB’s ‘expensive’ region. Closing under the rectangle would reveal a shorting opportunity. Such scenarios would present profit-booking levels in the $25,000 – $26,000 range.
On the other side, a closing beyond the setup would clear a 10% upsurge potential. Meanwhile, buying momentum saw an uptick within the past day as prices neared levels beyond the BB’s basis line.
Reasoning
The 24hr Relative Strength Index hasn’t crossed the equilibrium to regain bullishness on the daily chart. Meanwhile, the RSI presented overbought conditions on the 4hr chart. That increased the potential of a short-term retracement from 23.6% on the lower chart. Though the +DI somewhat crossed above the –DI, Bitcoin’s ADX appeared feeble.
Final Thought
Bears still dominate broader bias, and they might reinforce consolidation tendencies. Closing under the rectangle would offer a 10% shorting opportunity. However, increasing positivity would mean traders awaiting a close beyond the setup to benefit from near-term upticks towards the 38.2% mark.