Bitcoin seems to have lost its previous momentum and has now entered a new range, hovering between $21,200 and $24,400, which is a step up from the previous range of $17,000 and $21,000.
In an email update on Wednesday, Edward Moya, senior market analyst at the foreign-exchange broker Oanda said a bitcoin specific catalyst is needed to trigger a significant move above the $24,700 level. In general, the markets seem to have responded well to U.S. House of Representatives Speaker Nancy Pelosi’s visit to Taiwan. Last week the bitcoin price jumped by 11% which increased the number of buyers coming back into the market.
Bitcoin climbed higher and broke the $23,200 level but struggled to clear the resistance level near $23,500 and dropped again.
To avoid a bearish scenario in the short-term, bitcoin must clear the key resistance zone around $23,500. So far bitcoin has struggled to break through this resistance level and is now trading below the $23,200 level and the 100 hourly simple moving average. If it fails to clear the key resistance zone, we could see bitcoin continue moving downwards with an immediate support near the $22,800 level. A failure to close above $22,640 might result in the price dropping as low as $21,000.
The Relative Strength Index is now near the 50 level and most technical indicators are tempting towards bullish momentum for bitcoin. If the bitcoin price manages to move past the $24,000 level and trade above it for a while then this would further solidify the possibility of a bull run. Though the possibility of bitcoin retracing is not completely eliminated.
While the six-hour chart does not provide any clues as to what the direction of the trend is, major indicators such as MACD and DMI are indicating bullish momentum. The Moving Average Convergence Divergence depicts the price momentum and direction in the market, displaying a buying signal after undergoing a bullish crossover.
