Bitcoin Long-Term Buy Indicator Just Flashed as BTC faces Critical Resistance (Price Analysis)


BTC has continued to push up with impressive spot volume hitting an intraday high of $45.3k even during weekend trading.

The cryptocurrency is now testing one of the most critical levels of resistance at the 200-day moving average. Successfully reclaiming this level will trigger a significant buy signal in technicals, likely encouraging large momentum traders and other market participants to enter the market, further adding to buying pressure in an already supply exhausted state.

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Chart by TradingView

Another critical level that must be reclaimed for further upside is the 21-week moving average at $44.5K

Overall, the BTC technicals, structure, momentum, on-chain data, and sentiment have been trending higher, showing early signs of a strong recovery. One of the biggest signals of a market reversal is BTC futures open interest increasing throughout the 3-month long consolidation while funding rates were consistently negative, implying the market was net-short BTC, increasing the probability of an eventual short squeeze.

Strong spot buying, led to a massive short squeeze and pushed BTC from the lows of $28.8k to an intraday high of $45.3k

Near-Term Technicals Spell Caution

Near-term technicals appear to be overbought, with bearish divergence forming on the 4-hour chart. This suggests the BTC price could be entering a period of consolidation around current levels to prepare for the next major move.

Long-Term Buy Signal Flashing

What’s very interesting is the BTC Hash Ribbon Indicator has turned bullish on the day BTC is testing the 200-day MA. The Hash Ribbon simply measures the hash rate of the Bitcoin network over a 30-day and 60-day moving average. When the 30-day moving average crosses above the 60-day moving average, this signals potential miner capitulation – an indication that strength is returning to the Bitcoin network in hashrate.

Chart by TradingView

The bullish cross on the BTC Hash Ribbon indicator is considered a long-term buy signal for BTC. It’s more of a lagging indicator as BTC price does not immediately rally when it flashes. The 2 previous buy signals that flashed during major recoveries in BTC hash rate, saw near-term price consolidation, then eventually a significant rally higher.

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Chart by TradingView
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Chart by TradingView

Given the near-term overbought conditions for BTC, we could see a consolidation first, before a large rally. Ideally, a near-term consolidation would be healthier for the technical structure and make the recovery more sustainable.

The weekly close for BTC is coming up at a time where the 200-day moving average is being tested with a fundamental long-term buy signal flashing. Bulls are now waiting for one of the largest technical buy signals to flash.


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Cryptocurrency charts by TradingView.


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