Bitcoin has now solidified its position in the bull trend. With each recovery trend has come a risk of reversal though, which makes a strong point for bulls to continue to hold the value up. In times like this, a small slip-up can end up being devising for the value of the asset causing it to cascade down into another stretched out downtrend. However, if bulls are able to hold above this point, then bitcoin may well and truly enter into another raging bull market.
Why Current Position Is Important For Bulls
Bulls need to hold the current position for bitcoin if the digital asset is to continue on this bull trend. Otherwise, the reversal may be a brutal one that sends BTC back to the bottom it is trying to claw out of. Speculations for bitcoin still remain largely bearish, so anything to take the reins completely out of the hands of the bears remains the best course of action.
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With the current zone, it remains a hard fight for bulls as efforts to drag the value down seem to be working. For bears, this will be the perfect time to once again take action. Thisis because the price of bitcoin is in a zone where it had consolidated in December, which was followed by the crash towards $33,000. Spots like these make it hard to spot a clear resistance. There is resistance nonetheless as evidenced by the struggle to keep bitcoin above $44K.
Bulls must hold over crucial point | Source: TradingView.com
It’s also important to keep in mind that probably for downtrend towards $36K remains high. However, this may not be so if it continues its distribution through this zone. Another drop below $40K may very well see bitcoin break past $30K for the first time in a year, marking the beginning of a bear market.
Bitcoin Sell Between These Points
For bearish traders, this may very well be the best position to begin getting out. If bitcoin fails to break out of this consolidation and follow through to another rally, then the trend downwards will be swift.
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The recent rally was obviously the result of a short squeeze that pushed the price of the digital asset higher. If this does not hold, then bulls will have to form another major resistance point at $43,500. Since bitcoin has fallen below its 50-day moving average, it spells a period of bear trend for it, which can very well lead to a market crash, the likes of which was experienced in January.
BTC begins recovery after losing $2K | Source: BTCUSD on TradingView.com
From here on out, the next position that would solidify bitcoin in the bull zone is above $53K. If the price fails to break above this point, then it is in all likelihood gunning towards a bear trend, and with sell-offs from the recent recovery, could combine to form a breakdown point for bitcoin.
Featured image from The Motley Fool, charts from TradingView.com