Bitcoin appears poised for an impressive recovery to end this week after avoiding deeper pullbacks following outflows from Grayscale ETF, challenging key resistance levels along the way.
Cryptocurrencies’ volatile prices often make headlines, yet what really matters is how much of an impact they are having on money and finance. A single cryptocurrency might be worth more than an entire house one day and less than an automobile the next.
Price Action
When investing in cryptocurrency or digital assets, it is vital that you understand how price action could have an effect on their value. Crypto markets tend to be highly unpredictable and sensitive to various market conditions that could impact them significantly.
Traders can leverage price action to quickly identify trading opportunities. In addition, they should observe market behavior and trends to detect key support and resistance levels that should provide opportunities to take advantage of.
As soon as prices fall beneath their support level, traders’ stop losses are activated, which then creates additional selling pressure in the market, driving prices even lower. Market manipulators can take advantage of this by spreading rumors and sowing doubt in order to drive down Bitcoin prices further.
Bitcoin prices are determined by factors including supply and demand, investor sentiment, global fundamental events such as demonetization in India in 2016, as well as potential regulatory changes or speculation over regulations which may also have an effect.
Technical Indicators
There are various technical indicators available to measure Bitcoin’s price action. These tools allow traders to better understand market volatility and identify trends as well as give insight into market momentum that helps determine when to make trades.
Most technical indicators, including moving averages, relative strength index and Bollinger bands are used by traders to help detect possible trend reversals or entry points for their crypto trading strategy.
VROC (volume rate of change) can also be an extremely helpful indicator in spotting breakouts. When trading volume changes quickly enough to signal breakouts, VROC can measure how quickly its value changes – an effective indicator for spotting breakouts when combined with price action. When the VROC line rises with price action it could signal a strong upward trend while when falling it could signal weakening downward trends leading to short-term price corrections or trend reversals.
Long Term Trend
Bitcoin has seen steady upward movement for some time now. As more platforms accept it, demand rises, driving the price upward. New investment products, including futures and mutual funds that enable wider investor access have furthered this growth trend.
News stories and rumors often have a dramatic effect on prices, sparking either long-term gains or hindering them altogether. While negative stories could discourage short-term selling efforts altogether, positive updates could bring swift gains.
Last but not least, the 2022 bitcoin halving could play a part in its price. This event reduces the rate at which new bitcoin is released into circulation, and previous halvings have been followed by bull markets. While there may be other catalysts for price movements as well, should Bitcoin manage to overcome its current drawdown it may continue its journey upward toward new heights.
Short Term Trend
Bitcoin may be unpredictable in its price action, but it remains an irreplaceable force in money, finance and the economy. Soon it will be easier and faster than ever to make payments using this disruptive technology.
Bitcoin’s volatility was extreme this year, yet it ended strong, rising by 50 percent by mid-June as investors anticipated an exchange-traded fund (ETF) launch and tech stocks rallied, drawing in retail investors who may otherwise have been absent from the market in previous years.
Cryptocurrency traders are hopeful for more gains ahead. Technical analyst Thielen reports that Bitcoin (BTC) has already completed corrective wave four and entered an impulsive uptrend, expected to take it towards wave three’s top target of $47,000; any breakout above this threshold could result in further gains that push toward $48,000 or beyond.
- Friday Intraday Trading Sees Nvidia’s stock Market Cap Momentarily Cross $2 Trillion
- Trump’s January 6 Civil Cases Proceed While Criminal Case Is Halted
- Trump Delivers Speech at the Columbia Black Conservative Federation Gala
- Trump Declares Strong Support for IVF Following Alabama Supreme Court Decision
- Schumer in Ukraine Declares US Backing During House Aid Standoff
