Disclaimer: The conclusions of the following analysis represent the sole opinion of the author and should not be taken as investment advice.
Bitcoin [BTC] It has recovered decently in its up-channel trajectory since early July. However, the resistance range from $23.8k to $24.4k generated a reversal and brought down the king coin to confirm a breakout from the pattern.
Continued selling pressure has created a bearish position on the EMA band. As the $20.8k level is showing a reversal trend, buyers can aim to scale above $21.6k in the coming sessions.
A potential bearish reversal above this barrier could turn BTC higher in the short-term.
At press time, BTC was trading at $21,399.
BTC daily chart
After facing December 2020 lows in mid-June, buyers have shown some resilience over the past two months. As a result, BTC bounced above its four-month trendline resistance and flipped it to support.
An ROI of around 32% during this phase has helped BTC jump above its EMA band on the daily timeframe.
At the time of writing, BTC was trying to recover from its recent bullish channel breakdown. If the $20.8k level retains its value in investors’ minds, the coin could see a sluggish period near its control point (POC, red). In this case, the likely target for the coin would be in the $22.5K range.
However, sellers will aim to limit bullish gains after a bearish reversal of the band lies south of the 20 EMA. Additionally, selling volume has recently exceeded short-term buying pressure. Any drop below the $20.8K level could indicate a selloff.
Here, sellers could provoke a pullback towards the $19.8 zone before anticipating a rebound.
The decline below the Relative Strength Index (RSI) equilibrium corresponded to the bearish edge. The bulls should extend their rise towards the midline to generate a bullish bias in the near-term.
Interestingly, the Volume Oscillator recently dropped below zero during a green candle. This reading shows a lack of purchase volume in the current picture. Nonetheless, ADX forecast a weak directional trend for the coin.
Looking at the confluence of the POC and the $20.8K support, BTC buyers can aim to halt the current bleeding. However, a bearish crossover on the EMA band and lack of volume left BTC in a fragile position. The goal remains what was discussed.
Finally, investors/traders should consider the macroeconomic factors affecting overall sentiment. This analysis will help you increase your chances of making a profitable bet.