As the price spiked there is an indication that the price is headed higher. But there are also some signs of weakness.
Key Takeaways
- Bitcoin climbed above its 200-day EMA.
- Bullish sentiment to continue.
- Analysts predict new highs.
- Chart analysis shows worrying signs.
As the price of Bitcoin rose by slightly over 8% on Tuesday, August 29, 2023. after a period of a sideway movement, many traders and investors have interpreted this as a sign of a further uptrend continuation after consolidation.
Will we see the price finally breaking its July high and spike further up? Or are we going to see a more significant downtrend? In other words, has the price bottomed out at $15,500 in November last year or are we going to see new bear market lows?
Analyst – Bitcoin Bottomed
Twitter user Moustache, a crypto trader and analyst since 2015, pointed out that the price is still managing to hold above the 200-day EMA, which he interprets as a bullish sign.
He believes that the price isn’t going further lower and shares other supporting charts in some posts, saying “Bitcoin will probably never fall below $30,000 Dollars again.”
Bitcoin Price Analysis
The price of Bitcoin has been in a downtrend since July 13, when it reached a yearly high of around $31,750. Since then, it dropped by 20% to around $25,300 on August 19. Then it rose to about $28,200 on August 28.
This is a lower high than the previous one, meaning we have seen a positive price action and that the structure still shows a downtrend.
The Relative Strength Index (RSI) fell to 82% yesterday, August 30, 2023, indicating that the Bitcoin was in the overbought conditions. This could mean that a downturn may occurr again.
Previously, from November 21, 2022, when the price reached its lowest point of $15,500, an uptrend to $31,600 happened. Looking at the wave structure, it appears that this wave has ended on its July high. If this is true, now we are going to see a larger correction that may establish the first bull market higher low of $22,000.
Alternatively this uptrend completion marked the end of a higher degree ABC correction, that started on June 18 last year. In this scenario, a descending move may result in a new bear market low somewhere in $11,000 area.
Maybe the price is headed higher and, if this will be the case, it means the previous uptrend has to see another high before its completion. Considering that, from July, we have seen a 22% decrease from August 17 low of $24,700. Even if another high will arrive, a bearish scenario may arrive after its end.
Conclusion
The price staying above the 200-day EMA has served in the past as a significant indication that Bitcoin is in a bull market. In the 2015-2017 bull market, it served as a support, which was also the case from April to September 2019 and later from May 2020 to May 2021.
But as the logarithmic daily chart above shows, the price didn’t make a constant interaction with the line and instead held a gap. An interaction happened only once before, on March 27, 2017.
The current situation – with the price below the 200 EMA on May 10 and then again on June 15, now struggling to stay above it – reminds the period from August to December 2021, when a corrective move to the upside happened.
We are now seeing the third interaction with the 200-day EMA so, if it holds and the price starts increasing again, it could birng to a larger uptrend. But a more likely outcome is that it will move back under it and, in this case, we may see a larger descending move.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
