Bitcoin crossed a significant hurdle and touched the $9,600 level recently. BitMex, a trading exchange for Bitcoin, witnessed millions of short positions on BTC being squared off on Thursday.
The exit from the short positions was evidence enough that BTC headed for a big move up. Although things seem shiny for BTC currently, analysts advise to tread carefully, as Bitcoin is still in a technical bear market.
Bitcoin’s surprising move comes shortly after a top investment bank’s report
Bitcoin has always been known for surprises. It was just two days back when the marketplace for BTC started to look less liquid. Top banks and analysts came crying out loud against Bitcoin.
However, shortly after Goldman Sachs came up with its presentation on Bitcoin not being an asset class, BTCUSD started shooting up. The BTC marketplace was suddenly alive. A lot of trading took place in the last thirty hours or so.
Is Bitcoin out of the woods yet?
With Bitcoin making such large jumps in such a short period, the buying frenzy has begun. Investors who missed out on the gains feel they need to jump in now. However, it is essential to note that BTC is very volatile, and a quick dip from here would be no surprise!
The technical indicators signal red flags for BTC. The two immediate red flags are:
- Impending Death Cross on the four-hour chart
- The pivot point in place active from March
The four-hour BTCUSD timeframe reveals the impending Death Cross as the 50-period Moving Average is going to cross down the 200-period MA. Although trading activity spiked in the last two days, on average, it is still pretty low.
Moreover, the Pivot line, as marked in the BTCUSD chart, shows that there have been numerous occasions when Bitcoin retested this line and declined sharply. In this case, the Pivot line now is over $10,000. However, if it retests this again, the decline could push Bitcoin much lower than current levels.