Is Bitcoin heading for a correction after a brief recovery? Vital Trading Levels

Bitcoin had finally surged above $40,000 in the past 24 hours due to the Luna Foundation Guard (LFG) BTC buying spree. The price action was muted too soon though as the coin after recording a 7% rise, fell 4% at the time of writing. Bitcoin’s 24-hour trading volume has also taken a hit at the time of writing.

Bitcoin Fear Index reads 28 which corresponds to the feeling of fear, this reflected fear surrounding another crash for the king’s piece. It turns out that there was not much price impact even after buying LFG Bitcoin.

LFG earlier this week had added 2508 BTC which is worth over $100 million to its UST reserve. This brought the number of BTC to $42,406.92.

Additionally, the US inflation rate climbed 8.5%, a rate not seen in over 4 decades. The global cryptocurrency market capitalization stood at $1.95 trillion after falling 2.5% in the past day.

Bitcoin Price Analysis: Four-Hour Chart

BTC has just started trading above the $40,000 mark on the four-hour chart. Image source: BTC/USD on TradingView

Bitcoin was trading for $40,030 at the time of writing, slightly above the $40,000 mark. The coin had managed to break above its immediate resistance of $40,956 in the past 24 hours.

At press time, however, the asset was trading below the aforementioned resistance mark. The steady push from the bulls over the next few trading sessions could push prices up to $42,000.

A decline from the current price level would mean that BTC would be trading near the $38,000 support line. Failing to stay above that, the next support levels came in at $37,000 and then $33,000.

Trading volume had started to increase at the time of writing, with the latest trading session closing in green, signifying bullish action.

Related Reading | The Nightly Mint: Daily NFT Recap

Technical analysis

Bitcoin is still oversold on the four-hour chart. Image source: BTC/USD on TradingView

However, bitcoin had seen a brief rally in terms of buying pressure after the recent slump in buyers exiting the market. For most of this month, BTC has seen considerably weak buying strength.

On the relative strength index, the coin was seen below the half line, indicating that sellers were more than buyers in the market. This also matched the fear index. For buyers to re-enter the market, greater market strength is needed.

Chaikin Money Flow, which determines capital outflows and inflows, was also in line with the RSI. Capital outflows were greater than capital inflows, as seen on the four-hour chart.

Related Reading | Ethereum at $3028, where is the next critical support level for ETH?

Bitcoin is showing the start of positive price momentum. Image source: BTC/USD on TradingView

Bitcoin may be trying to recover its old levels as the coin has once again oscillated near the $40,000 resistance mark. The asset showed a positive change in its price, as evidenced by the indicator above.

MACD determines the price movement of the coin.

BTC has witnessed a bullish crossover at the time of writing, which means that over the next few trading sessions, BTC may try to teach its immediate price cap. MACD had been flashing green histograms at the time of writing, signifying a bullish trend.

Garland K. Long