Yesterday we were scanning local lows on the Bitcoin chart as the coin dipped under $30,000.
Today, BTC has rebounded to an extent, up to around $31,800 as of press time.
Analysts are looking closely at resistance and support levels to understand whether Bitcoin is due to go higher or lower as it hovers around this important psychological price point.
Aayush Jindal at NewsBTC estimates a key support level at $29,250.
“Bitcoin price extended its decline below the $30,200 and $30,000 support levels,” Jindal writes. “BTC even settled well below the $30,000 level and the 100 hourly simple moving average to move further into a bearish zone. The price even spiked below $29,500 and traded as low as $29,313. It seems like bitcoin is forming a support base above the $29,250 level. An initial resistance on the upside is near the $30,000 level. It is close to the 23.6% Fib retracement level of the recent downward move from the $31,900 swing high to $29,313 low … There is also a key bearish trend line forming with resistance near $31,300 on the hourly chart of the BTC/USD pair. In the short-term, bitcoin price might start a decent recovery above $30,000, but it might face barriers near the $31,000 level in the near term.”
“The relative strength index (RSI) on the four-hour chart registered an oversold signal on Monday as bitcoin dipped below $30,000,” adds Damanick Dantes at Coindesk. “The RSI is not yet overbought, which could keep buyers active towards $34,000 resistance.”
If, as Jindal suggests, bearish strength is weakening, we could see a significant recovery for Bitcoin and the rest of the cryptocurrency market by proxy.
However much of that may depend on how stakeholders tackle the issue of energy consumption related to Bitcoin mining. Stay tuned and watch proxy investments like Grayscale’s Bitcoin Trust (GBTC) for further clues.