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As Wall Street Panics, Bitcoin Attempts Strong Recovery

January 28, 2021 at 11:35 by Ibrahim Anifowoshe

Despite Wall Street closing in red after yesterday’s trading session, Bitcoin has recovered some of its losses. Currently putting the flagship cryptocurrency on a launchpad to $40,000.

After losing key support levels at $31,000, the bearish leg explored levels slightly under the $30,000. However, buyers were keen on ensuring a limit to the downward momentum. Most alternative coins also enjoyed a bounce off the lows as ETH hit $1,300 while UNI jumped to an all-time high.

Earlier this week, the flagship cryptocurrency attempted to overcome $35,000 in an unsuccessful bullish run. From them on, the coin gradually decreased in value. This drop led to an adverse decrease below the psychological level of $30,000.

After the dip, bulls quickly gripped the market and pushed the price to reclaim $30,000. At 10:11 AM GMT on Tuesday, the coin was trading at $31,455, a 0.48% gain over the last 24 hours. The 50-day Simple Moving Average protected the immediate downside.

Bitcoin‘s decline yesterday coincided with substantial losses on Wall Street. Dow Jones, Nasdaq, S&P 500, the three most prominent US stock indexes experienced a 2% drop in a day. As GameStop shares surged in short squeeze, Nasdaq futures contracts added 1%, while Dow Jones and S&P 500 have remained in indecisive movements.

Bitcoin is facing a critical resistance

However, Bitcoin is facing a critical resistance. This is brought by the ascending parallel channel’s middle boundary. The price action above this zone is likely to add credibility to the bullish outlook.

At the same time, it appears that the gap made by the 50-day Simple Moving Average above the 100 and 200 SMAs suggests that buyers have the upper hand. Key levels must come down for the king cryptocurrency to jump-start the rally to $40,000.

JAN28-BTC

When BTC breaks above $32,000, there is a likelihood that more investors will be interested in the market. More will be willing to consolidate their positions by increasing their holdings. If this happens, a strong tailwind behind Bitcoin pushing it strong enough to break the $36,000 hurdle will be created.

The Moving Average Convergence Divergence or MACD still reinforces a downtrend. Generally, the MACD shows the direction of an asset’s trend and its momentum. It appears that, for now, the MACD line is below the signal line. This means that a proper recovery may take awhile to come into fruition.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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