Bitcoin price has, over the last 24 hours, lost 1.1% of its value and is trading at $30,308 on Monday. The largest cryptocurrency sustained a bullish outlook over the weekend, with consolidation taking precedence above $30,000.
Despite the aggressive push by the bulls, Bitcoin price could no longer sustain gains beyond its 12-month high of $31,428.
According to analysts at Rekt Capital, “When a BTC correction ends so convincingly… It’s highly unlikely another deep correction will occur right after. Any downside would likely be dips as part of new uptrend continuation.”
Bitcoin price is currently fighting for support at $30,000 following the pullback from $31,428. It is plausible that this correction is part of the larger uptrend brought about by last the improved market structure.
In the same way, as the Rekt Capital analyst says, BTC may be circling back to either $30,000 or $29,000 to allow more buyers to join the market and capitalize on the anticipated move to $38,000.
Based on the chart, Bitcoin’s market structure has improved significantly in the last week. The uptick above all the applied moving averages (the 50 EMA, the 100 EMA, and the 200 EMA) and the short-term descending trendline from mid-April reveal that buyers have the upper hand.
A buy signal from the Moving Average Convergence Divergence (MACD) reinforced the bullish narrative. However, investors may need to keenly follow the movement of the MACD in the coming sessions or a few days.
Remember, a sell signal could come into the picture if the MACD line in blue crosses below the signal line in red. The Relative Strength Index (RSI), currently in the overbought region, may retreat from into the neutral zone, thus adding intensity to the overhead pressure.
On-chain data from Glassnode, a leading analytics platform, has revealed that the percentage of Bitcoin supply held across exchange addresses has continued to drop since the pandemic. The chart below indicates that this supply accounts for 2.27 million BTC, approximately 11.7%.
This is also the lowest the supply of BTC across exchange has dwindled to, for the first time since December 2017.
As supply shrinks on exchanges, selling pressure tends to fall significantly. With demand for Bitcoin increasing, it creates a suitable environment for a rally.
Investors may want to watch for Bitcoin’s reaction at $30,000. A rebound from this level would mean that bulls are ready to propel BTC to $38,000.
On the downside, we may see Bitcoin price revisit support areas at $29,000 and $28,000. Such a drop would allow bulls to tap fresh liquidity as they push for a stronger trend reversal.
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