BTC continues to rise with an impressive spot volume reaching an intraday peak of $45.3k even in weekend trading.
Now, the cryptocurrency is testing the 200-day moving mean. This level of resistance is the most crucial. This level can be reclaimed with great success. It will likely trigger a buy signal in technicals. This could encourage large momentum traders and other market participants into the market.
The 21-week moving average of $44.5K is another critical level to be reclaimed in order to further your upside.
The BTC technicals and structure, momentum, sentiment, and on-chain data have all trended higher in the first signs of a strong recovery. BTC futures open interests increased over the 3-month-long consolidation, which is a sign of a market correction. However, funding rates were always negative. This suggests that the market was short BTC, increasing the likelihood of a short squeeze.
Spot buying was strong and led to a huge short squeeze that pushed BTC from $28.8k lows to $45.3k intraday highs
Caution in Near-Term Technicals
The near-term technicals are overbought with bearish divergence appearing on the 4-hour chart. This could indicate that the BTC price is entering a consolidation phase at current levels in preparation for the next major move.
Long-Term Buy Signal Flashing
It’s interesting to note that the BTC Hash Ribbon indicator has become bullish just as BTC tests the 200-day MA. The Hash Ribbon measures the hash rate of Bitcoin over a 30-day period and a 60-day period. The potential for miner capitulation is when the 30-day moving mean crosses the 60-day average. This indicates that the Bitcoin network’s strength in hashrate is returning.
BTC Hash Ribbon’s bullish cross is considered a long-term Buy Signal. This indicator is more of a lagging indicator because BTC does not rally immediately after it flashes. Two previous buy signals, which flashed during significant recoveries in BTC’s hash rate, saw price consolidation and then eventually a significant rise higher.
We could see a consolidation before we see a major rally, given the current overbought conditions of Bitcoin. A near-term consolidation is better for the technical structure and would make the recovery more durable.
BTC’s weekly close is just as the 200-day moving mean is being tested by a fundamental long term buy signal flashing. Bulls are waiting for the flashing of one of the most important technical buy signals.