November 8, 2024

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Bitcoin traders pinpoint support levels as BTC price taps $26.2K

3 min read
1 year ago admin
Bitcoin traders pinpoint support levels as BTC price taps .2K

Bitcoin (BTC) recovered its weekly close losses on Aug. 28 as risk assets rose on Chinese tax cuts.

BTC/USD 1-hour chart. Source: TradingView

BTC price 200-week EMA stands out as support

Data from Cointelegraph Markets Pro and TradingView followed a BTC price uptick into the day’s Wall Street open.

BTC/USD managed $26,226, marking its highest level since Aug. 25 and fully compensating for the weakness seen overnight.

News that China had cut tax on stock trading by 50% appeared to buoy U.S. futures into the open. The S&P 500 and Nasdaq Composite Index subsequently opened up 0.6% and 0.7%, respectively.

Eyeing the trading landscape for the coming week, Michaël van de Poppe, founder and CEO of trading firm Eight, flagged the 200-week exponential moving average (EMA) at around $25,700 as a key support zone to protect.

“First of all, the 200-Week EMA lies beneath us. It’s at $25,650 (Bitstamp) or $24,750 (Binance). The conclusion is, you don’t want to drop beneath that level and you’d preferably want to mimic 2015-2016 sideways period,” he wrote in part of a post on X (formerly Twitter).

“If the 200-Week EMA sustains, conclusions are that we’re bottoming out here and we are potentially getting a massive entry point. If it’s lost, I’d be looking at a case of $19,500-21,500 as the next big entry point and final capitulation. On the lower timeframes and over the week, it’s still possible to sweep below the 200-Week EMA. As long as we don’t lose the level.”

BTC/USD annotated chart. Source: Michaël van de Poppe/X

Van de Poppe continued that order book liquidity “most likely” resided below the 200 EMA.

“In that regard, a sweep of that area is the most likely outcome,” he wrote.

“Two strategies can be deployed: 1 – Sweep at $25,750 for an aggressive long entry towards the other side of the range (entry can only be taken after the sweep and when $25,750 is reclaimed). 2 – Sweep of $25,200 towards $24,700-25,000 (the 200-Week EMA on Binance) and bullish divergences on higher timeframes. That’s the golden trade and could be the start of a reversal. However, $25,750 should be reclaimed in the bounce, otherwise this trade could be invalid/stopped out.”

BTC/USD annotated chart. Source: Michaël van de Poppe/X

Popular trader Titan of Crypto meanwhile highlighted $25,900 as a prominent zone of interest.

“$25,900 is the level to watch,” he summarized in part of X analysis.

Bitcoin RSI stays “very low” for second week

Elsewhere, fellow trader Pheonix referenced persisting low levels on Bitcoin’s relative strength index (RSI) on lower timeframes.

Related: September ‘crash’ to $22K? — 5 things to know in Bitcoin this week

As Cointelegraph reported, depending on the timeframe in question, these reached levels not seen in five years after the 10% BTC price dip ten days ago.

“RSI still very low, for 1.5 weeks already now,” part of their X commentary on Aug. 28 read.

“7/8 times it went below 25 the last years, corresponded to the (local) bottom & a 30% minimum rise followed.

Further analysis showed the one exception to the rule coming in September 2019.

The RSI attempts to measure when an asset is overbought or oversold at a given price point.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.