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Bitcoin’s brief rise above $100,000 and subsequent decline may lead to a short-term sell-off.
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Fairlead’s Katie Stockton highlighted two key support levels bitcoin traders should watch.
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Long-term indicators remain bullish, supporting a continued uptrend into 2025, Stockton said.
Bitcoin’s short-lived cross above the key psychological level of $100,000 could set the cryptocurrency up for a corrective sell-off in the near term.
That’s according to Katie Stockton, technical analyst and founder of Fairlead Strategies.
In a Monday note, Stockton highlighted that Bitcoin’s inability to hold above the $100,000 level for more than a few days has left the historic breakout “unconfirmed” and opened the cryptocurrency up to potential weakness in the short term.
“Short-term momentum is weak, and there is a new daily counter-trend signal that supports another couple weeks of digestion before bitcoin resumes its uptrend,” Stockton said.
The counter-trend “sell” signal Stockton is eyeing supports at least two more weeks of consolidation, she said.
The two levels of support investors should watch include the 20-day moving average at $97,233 as of Tuesday morning, as well as the 50-day moving average at $85,342.
If bitcoin fails to hold above its 20-day moving average, Stockton highlighted the 50-day moving average as the next logical level of support for bitcoin to trade toward.
That represents a potential downside of about 13% from current levels, with bitcoin trading at $97,690. If the 50-day moving average fails as support, Stockton highlighted $73,800 as the next likely level for bitcoin to trade to, representing a potential downside of 24%.
“But this level is unlikely to be relevant in the short term,” Stockton said of the lower support level.
Despite the short-term breakdown below $100,000, bitcoin still has bullish momentum on an intermediate- and long-term basis, Stockton said.
That suggests that any corrective action in the token’s price should ultimately be short-lived, with the cryptocurrency’s longer-term uptrend continuing higher as the market heads into 2025.
“Our intermediate-term indicators point higher, supporting a bullish bias beyond the short term. This suggests a severe pullback can be avoided,” Stockton said. “Our long-term indicators shifted higher last month, supporting a bullish bias in 2025.”
Read the original article on Business Insider
