Bitcoin prices are moving along some hopeful lines that indicate that a recovery is around the corner. The daily closings are ending up above the $30,000 level, but analysts say that investors should not expect a sharp ‘V-shaped’ recovery or generational bottoms.
On Friday, Bitcoin bounced towards the $30,000 mark with buyers reacting to oversold situations. But any upside seems to have been limited and could come up against resistance at the level of $33,000 and again at $35,000.
The momentum signals have stayed negative on the negative side in all the day-to-day, weekly, and even the monthly charts. This usually leads to a period of negative or low returns.
Bitcoin is also on course for a consecutive decline of 7-weeks, a first-ever for crypto. This is based on TradingView’s release of the price data of Coinbase calculated from 2014. It indicates a negative momentum in the price.
As of now, Bitcoin prices are approaching the lower support mark, close to its moving average for 200-weeks, which now stands at $21,800.
Immediate support is in the range of $27,000 to $30,000. It is expected to stabilize the price action in the coming days.
A Sharp Recovery In Bitcoin Prices Seems Unlikely At The Moment
On Thursday, counter-trend signals over the short-term were noticed on the charts. This typically moves towards a brief bounce-back at prices.
The weekly RSI (relative strength index) on the chart has been oversold ever after March 2020. But negative momentum and strong resistance suggest a limited upside in the coming few months.
According to Rekt Capital, to get back to its past bullish momentum, Bitcoin has to retain $28,600 as the support price for it to test $32,000. A weekly closing below the green should indicate a bearish trend.
The pseudonymous analyst warned that given past trends, an abrupt V-shaped recovery marking a generational lowest seems unlikely. Broadly, the total cryptocurrency market is now at $1.287T with Bitcoin dominating at 44.4%.