More

    BTC Eyes Today’s Critical Weekly Close As Volatility Continues

    Yesterday’s BTC price action shook traders throughout the day with rounds of short and long liquidations. Bitcoin’s price managed to hold the 200-day moving average at $45.3k as support, making an intra-day wick to $46k, and pushing higher into yesterday’s daily close at $47.1k

    Chart by TradingView

     

    So far, today’s price action appears similar to yesterday’s wild swings. It’s another low-volume pullback that liquidated longs. This time, BTC nearly touched critical support at the 200-day moving average – around $45.4K – before wicking back up, as of writing these lines.

    btcuusd-aug15-p2
    Chart by CryptoQuant

     

    It’s important to note how low volume pullbacks signal weak selling pressure. In comparison, high volume pullbacks with closes at the day’s lows are a bearish signal, indicative of large entities selling. Low volume pullbacks tend to be related to technical selling and moderate leverage liquidation on a near-term basis.

    The Importance of Volume Levels

    A great example of a low volume pullback is the BTC daily close below $30k on July 20th, 2021. The selling on this particular day confirmed by on-chain analysis came from short-term holders, retail hands, traders getting liquidated and small miners.

    The aggregate volume on this day was 88% lower than the selling climax when BTC hit an intraday low of $28.8k.

    btcuusd-aug15-p3

    On-chain analysts argued that if long-term holders and large entities holding large amounts of illiquid supply were selling on July 20th, 2021, we would have seen tens of billions of dollars in aggregate spot volume.

    Instead, aggregate spot volume was down 88%, and formed what the analysts are calling the completion of the largest “bear trap” of the current bull market. The day after, BTC printed a large bullish engulfing candle and began attempting to re-enter into bull market continuation.

    This can be seen as a defining moment in BTC history as the bears were highly confident in $30k breaking, while the bulls remained steady and accumulated.

    BTC bulls are now waiting for the weekly close as the most significant technical buy signal could flash if BTC closes above the 21-week moving average and 200-day moving average at $43.9k and $45.4K, respectively.

    Bitcoin Price: What to Watch in the Near-Term

    BTC needs to hold the 200-day moving average at $45.4K for the weekly close. If BTC falls below this key level, the next near-term zone of support is between $43.8k and $42.6k.

    The structure will remain strong as long as this key zone holds and BTC pushes higher to reclaim the 200-day. If BTC falls below $42.6k, the risk of retesting the top of the trading range at $41.3k to $40.9k will increase significantly and the technical structure will weaken. Ideally, bulls should avoid this scenario and hold the 200-day moving average.

    With just over half a day remaining until the weekly close, bulls and bears will continue to fight it out. The weekly close will likely determine the direction of BTC for the next few months. Strengthening fundamentals, improving momentum, and bullish on-chain metrics make the largest cryptocurrency’s mid to long-term outlook favorable.

    SPECIAL OFFER (Sponsored)

    Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

    PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to get 50% free bonus on any deposit up to 1 BTC.

    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

    Cryptocurrency charts by TradingView.

    Related articles

    Comments

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    Share article

    Latest articles

    WazirX, Presearch and Komodo rally after data shows a surge in user activity

    The characteristically volatile nature of the cryptocurrency market is back in full force on Dec. 2 after the optimism of the past couple of...

    Onomy Protocol to Spearhead Institutional Adoption of

    Breadcrumb Trail Links Newsfile Author of the article:   Article content Casper, Wyoming–(Newsfile...

    Fidelity’s spot bitcoin ETF is set to start trading in Canada, while its US fund is still waiting for the SEC’s green light |...

    Fidelity has launched a spot bitcoin ETF in Canada that will start trading on Thursday. Fidelity is "the biggest asset manager to date with a...

    Newsletter

    Subscribe to stay updated.