Technical Analysis – BTCUSD skyrockets on ETF speculation
October 24, 2023 9:25 am
Bitcoin surges to an almost 18-month high
Broader picture appears overly positive
But overstretched rally increases the risk of a correction
BTCUSD (Bitcoin) soared to an almost 18-month high on Tuesday, driven by speculation that an exchange-traded fund (ETF) that tracks the price of Bitcoin could soon be approved by the United States.
The crypto king rallied more than 10% to hit 35,187, before pulling back below the 34,500 zone, which is marked as resistance by the inside swing low of February 24, 2022. Overall, Bitcoin is trading well above the upward sloping trendline taken from the first day of the year, and thus, the picture appears to be overly positive.
Both the RSI and the MACD are detecting strong upside momentum, corroborating the latest surge, and suggesting that buyers are likely to stay interested in this cryptocurrency a while longer. The former is lying well above its 70 line and continues to point north, while the latter is running above both its zero and trigger lines, pointing up as well.
If another attempt to break above 34,500 proves successful, the bulls may then feel encouraged to climb towards the 37,500 zone, marked by the inside swing low of May 1, 2022. If that obstacle is not able to stop the rally either, then the next area to watch out for may be the round number of 40,000.
On the downside, if the bulls decide to lock profits due to the immediate and steep surge, they may allow a pullback towards the 31,500 barrier, which offered resistance in June and July, and if they are not willing to buy again around there, then the retreat may continue towards yesterday’s low of 29,700.
To sum up, BTCUSD has been in a rally mode since yesterday on bets of an ETF approval, with the broader uptrend looking promising. However, the steep rally increases the risk of a counter, corrective, move before the initiation of the next impulsive wave.
Bitcoin surges to an almost 18-month high
Broader picture appears overly positive
But overstretched rally increases the risk of a correction
BTCUSD (Bitcoin) soared to an almost 18-month high on Tuesday, driven by speculation that an exchange-traded fund (ETF) that tracks the price of Bitcoin could soon be approved by the United States.
The crypto king rallied more than 10% to hit 35,187, before pulling back below the 34,500 zone, which is marked as resistance by the inside swing low of February 24, 2022. Overall, Bitcoin is trading well above the upward sloping trendline taken from the first day of the year, and thus, the picture appears to be overly positive.
Both the RSI and the MACD are detecting strong upside momentum, corroborating the latest surge, and suggesting that buyers are likely to stay interested in this cryptocurrency a while longer. The former is lying well above its 70 line and continues to point north, while the latter is running above both its zero and trigger lines, pointing up as well.
If another attempt to break above 34,500 proves successful, the bulls may then feel encouraged to climb towards the 37,500 zone, marked by the inside swing low of May 1, 2022. If that obstacle is not able to stop the rally either, then the next area to watch out for may be the round number of 40,000.
On the downside, if the bulls decide to lock profits due to the immediate and steep surge, they may allow a pullback towards the 31,500 barrier, which offered resistance in June and July, and if they are not willing to buy again around there, then the retreat may continue towards yesterday’s low of 29,700.
To sum up, BTCUSD has been in a rally mode since yesterday on bets of an ETF approval, with the broader uptrend looking promising. However, the steep rally increases the risk of a counter, corrective, move before the initiation of the next impulsive wave.
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