Bitcoin (BTC) opened the day higher, with its price rising to over $95,000 (USD). This movement takes place after closing lower for three consecutive days.
The turning point was touching USD 92,000. When the currency fell to such a level yesterday, demand gained strength, making it impossible for it to fall further and encouraging it to rise from there.
It is not surprising that this happened, given the behavior that bitcoin has been having. The zone between USD 90,000 and USD 92,000 has formed as strong support in the last month and a half.
What does this mean? A support is a temporary zone of minimum prices, resulting from greater demand than supply. In other words, it is a price area where purchases tend to increase, which makes appreciation possible from there.
Since late November, the bitcoin market has tested the range between $90,000 and $92,000 as support on multiple occasions. For this reason, NoticiasVE had advanced in another article that, if there was a setback, it was likely that the market would rebound upon reaching such an area.
The fact that the price successfully rebounded from this support again yesterday, as the chart below exhibits, is a positive sign. The reason is that it indicates market strength in that price area, something that usually encourages investment appetite. Therefore, the achievement of this phenomenon It is key for bitcoin to continue rising.
It is also worth remembering that the price of bitcoin has been setting new historical records since November, when Donald Trump won the United States elections. Therefore, it is essential that solid floors form at this stage of price discovery to sustain the rise.
Pullbacks in an uptrend are healthy to check demand strength. In this sense, it is crucial to keep in mind that it is a totally normal behavior of upward cycles.
In fact, bitcoin usually sees drops of around 20% during bullish cycles, so its formations do not necessarily mean the end of the rise. That is why the current decline from its historical maximum has not yet scared away the optimistic expectations that reign for this year.
Currently, bitcoin is trading around USD 95,000, which is 12% below the all-time high of USD 108,000 recorded three weeks ago.
Bitcoin reached oversold levels this week
According to the relative strength index, better known by its acronym in English “RSI”, bitcoin hit oversold levels this week. This is how you can see it on your graph measured every hour.
The RSI, which measures when an asset is overheated or undervalued, signals that an asset may be oversold and expect a rise when it falls below the level of 30. On the other hand, when it rises above the score of 70, it means that the opposite may happen and a decline is about to occur. recoil.
After the hourly RSI fell below 20 this week, it recovered to reach 60, as shown below. This advances that the market is no longer oversold, but it is not yet overboughtso it could continue to rise.
In correlation with this, different specialists such as the market research firm Glassnode have stated this week that there are still no signs of the end of the cycle. Although, of course, it is key that investors do their own research to carry out their operations and prevent possible risks.
In the event of a larger decline, as NoticiasVE indicated, bitcoin could retreat to other psychologically strong areas of the past, such as around USD 73,000. Such a level has functioned as strong resistance in 2024.