Rooting against Bitcoin during a positive rally might be considered cynical by the hyper-bullish community, but it is important to note the major swings. After all, the asset unleashed a relentless rally on July 20, and from a health standpoint, the “rooting” against Bitcoin now only helps the digital asset in the long term.
In keeping with that thinking, we analyzed some important signals that emerged during the last 24 hours, which can act as key information for the next few days.
SMA fight for Bitcoin?
The simple moving average is an indicator that on a long-term framework has effectively facilitated strong movements for Bitcoin. On August 9, BTC managed to close above the 200-SMA, but since then, there have been more difficulties. Over the past week, BTC has not generated enough ground away from the SMA and at press time the asset could close below resistance once again.
Historically whenever Bitcoin has sharply broken above the 200 SMA, there has been a bullish rally. However, there have been cases where hesitation near the SMA has prompted corrections. For Bitcoin, this could just be a lack of momentum needed to push the price above the moving average.
Second, based on data, Bitcoin’s fair value deviation is currently below the 0-zero line in the chart above. FVD is a created metric that is identified with fair value in mind. At the moment, the indicator is largely below the bullish turn (zero line), which suggests that Bitcoin has not really locked into a defined bullish momentum on the chart.
The position of BTC with respect to the indicator is also not bearish, but it is in a range, where corrections can definitely be expected.
The funding rate dilemma for Bitcoin?
Yes, the funding rate is still positive, but it is no longer in a suitable range. With rates on the rise for other altcoin pairs, an aggressive correction should be expected in the short term. If you look closely at the chart, Bitcoin’s funding rate has turned slightly negative, which means that selling pressure is already starting to build on different exchanges.
Can the market still recover?
The Bitcoin market has rallied for 2 weeks, so there is no doubt that it will rise again. It could bounce back from its current position, but right now, it lacks momentum. With the market consolidating strongly last week, BTC is in a week off; it’s a $ 42k support or a $ 50k jump.
This is a machine translation of our English version.
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