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Bitcoin (BTC) has recently appeared poised for significant upward momentum and has seen a notable price correction. After a two-month high of $66,500 last Friday, the cryptocurrency fell nearly 6% in the past week to around $60,000 by Thursday.
Major buying areas for Bitcoin
Bitcoin’s expected uptrend was initially driven by easing economic conditions, especially after the US Federal Reserve’s decision resolution To cut interest rates on September 18.
However, it escalated Geopolitical tensions In the Middle East, it has transformed investor sentiment, prompting many to seek refuge in traditional safe-haven assets such as gold.
In addition, concerns about the macroeconomic landscape intensified, especially after Federal Reserve Chairman Jerome Powell suggested the possibility of further 0.50% interest rate cuts in the coming months.
This confluence of factors has led to a broader scope Market saleBitcoin, Ethereum, and the most important cryptocurrencies on the market are witnessing large inflows of liquidity estimated at approximately $300 million, as shown in the total market capitalization of cryptocurrencies.
Despite the recent decline, cryptocurrency analyst VirtualBacon offered more Optimistic outlook on social media, noting that Bitcoin has returned to a “bull market support range.”
The analyst highlights that this support range has historically provided a cushion during corrections between current market prices and the $62,500 mark on the weekly time frame.
VirtualBacon emphasized that a weekly close above $58,000 could indicate a healthy correction, paving the way for a recovery. Conversely, a break below this limit will require a re-evaluation of bullish strategies.
The analyst pointed out two main things Purchase areas: $62,500 and a lower range between $58,800 and $60,000. These areas coincide with previous highs and correspond to the 200-day Exponential Moving Average (EMA), which is a major long-term support level for any bull market.
The 200-day moving average, which is currently around $60,000, has been pivotal over the past six months. It served as support and resistance during different phases of Bitcoin price movements in March, May and July of this year.
The September jobs report looms large
In its analysis, VirtualBacon explained that if Bitcoin rebounds from the $60,000 level, it would indicate market strength. However, a daily close below $58,000 – or a weekly close below this level – could signal a potential reversal to the downside.
VirtualBacon has outlined a strategy to take advantage of the current decline, indicating a desire to accumulate Bitcoin In the $58,000 to $60,000 range, which he considers a high-risk, high-reward area. However, he warned that a close below $57,000 would be a significant red flag.
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For the analyst, as long as Bitcoin price exceeds $58,000, there will likely be a higher decline, paving the way for a new price peak above $66,000. However, macroeconomic factors will remain crucial in shaping this economy Market sentiment.
This week’s September issue Jobs report It will be of particular interest, because it will provide insight into the current unemployment rate, which could influence future Bitcoin price movements, according to the analyst:
- 4.2%: Very bullish for the market.
- 4.3%: Neutral view.
- 4.4%: Caution is required.
- 4.5% and above: bearish effects.
At the last meeting of the Federal Open Market Committee (FOMC), Jerome Powell identified 4.4% as a critical threshold. If the unemployment rate rises above this level, VirtualBacon believes it could signal trouble in the broader economic landscape.
Featured image of DALL-E, chart from TradingView.com