December 9, 2024
Bitcoin traders pinpoint support levels as BTC price taps .2K

Bitcoin (BTC) pared its weekly closing losses on Aug. 28 as risky assets rallied on Chinese tax cuts.

BTC/USD 1-hour chart. Source: TradingView

BTC price 200-week moving average acts as support

Data from Cointelegraph Markets Pro and transaction view Bitcoin prices rose as Wall Street opened for the day.

BTC/USD touched $26,226, its highest level since Aug. 25, fully recouping overnight weakness.

News that China will cut the tax on stock transactions by 50% seemed to lift the opening of U.S. futures. The S&P 500 and Nasdaq Composite then opened up 0.6% and 0.7%, respectively.

With an eye on the trading landscape for the week ahead, Michaël van de Poppe, founder and CEO of trading firm 8, flagged the 200-week exponential moving average (EMA) around $25,700 as a key support area to protect.

“First of all, the 200-week moving average is just below us. It’s $25,650 (Bitstamp) or $24,750 (Binance). Conclusion, you don’t want to go below that, you better want to mimic the sideways period of 2015-2016, ’ he wrote in an essay. X posts.

“If the 200 week EMA holds, the conclusion is that we are bottoming out and we could be getting a huge entry point. If it loses, I would consider $19,500-21,500 as the next big entry and eventual capitulation point … a break below the 200-week MA is still possible on lower time frames and into the week. As long as we don’t lose the level.”

BTC/USD annotated chart. Source: Michael van de Poppe/X

Van de Poppe went on to say that order book liquidity is “most likely” below the 200 EMA.

“In this regard, sweeping the area is the most likely outcome,” he wrote.

“Two strategies are possible: 1 – Sweep $25,750, aggressive long entry to the other side of the range (only enter after sweep and reclaim $25,750). 2 – Price rises from $25,200 to 24,700-25,000 USD (Binance 200-week EMA) and there is a bullish divergence on higher time frames. This is a gold trade, possibly the start of a reversal. However, $25,750 should be reclaimed on a bounce, otherwise this trade may be voided/closed Close the position.”

BTC/USD annotated chart. Source: Michael van de Poppe/X

Meanwhile, popular cryptocurrency trader Titan highlighted $25,900 as an important area of ​​interest.

“$25,900 is a level to watch,” he concluded in an X analysis.

Bitcoin RSI Holds ‘Very Low’ for Second Week in a Row

Elsewhere, trader Pheonix mentioned that Bitcoin’s relative strength index (RSI) has been consistently low on shorter time frames.

Related: September ‘Plunge’ to $22,000? — 5 things to know about Bitcoin this week

As Cointelegraph reported, depending on the time frame in question, these prices reached levels not seen in five years following BTC’s 10% price drop just 10 days ago.

“RSI is still very low for 1.5 weeks,” read part of X’s commentary that day.

“Over the past few years, 7/8 of the time it has dipped below 25, which corresponds to a (local) bottom, followed by a minimum gain of 30%.”

Further analysis revealed that an exception to the rule will occur in September 2019.

RSI attempts to measure when an asset is overbought or oversold at a given price point.

This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.