Bitcoin and Ethereum are repeating historical patterns in the short term. This repetition of past behavior suggests that traders should be cautious but also ready to capitalize on opportunities. According to analyst Josh of Crypto World, a bearish signal was confirmed. Despite this, the analyst said that even within a bearish trend, short-term pumps are possible.
The bearish trend, however, could be proven wrong if Bitcoin manages to break above a key resistance level, which is currently around $68,500 to $69,000. A breakout above $70,000 would be even more significant, setting the stage for a new bullish trend.
Key Support Levels: Bounces and RSI Observations
Recently, Bitcoin experienced a bounce off a crucial descending support line just below $54,000. This bounce was also supported by the Relative Strength Index (RSI), which showed that Bitcoin was in an oversold territory on the daily timeframe. This setup suggested that a relief rally was imminent, which happened over the following days.
However, the analyst warned that the RSI has now moved back to neutral levels, meaning there’s more room for downside movement. This was similar to a pattern observed in late June and early July, where an oversold RSI was followed by a slight relief rally, only for the market to resume its downward movement afterward.
Resistance Levels and Short-Term Outlook
The analyst identified several key resistance levels that Bitcoin must overcome to confirm a bullish reversal. The first is around $63,000, where a high volume of trading has taken place, creating a strong resistance zone. Additionally, there is resistance between $67,000 and $68,300.
On the shorter-term four-hour chart, the analyst drew parallels between the current price action and the market bottom during the COVID-19 crash in March 2020. This comparison suggests that the market might be setting up for a similar recovery.
Lastly, the analyst reviewed the Bitcoin liquidation heatmap, noting significant liquidity around the $70,000 level. However, before reaching this target, Bitcoin must overcome the aforementioned resistance levels.
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