It’s all about the 200-week EMA and the area just below $26,000 if Bitcoin bulls are to stand a chance, BTC price analysis says.
Bitcoin (BTC) recovered its weekly close losses on Aug. 28 as risk assets rose on Chinese tax cuts.
BTC price 200-week EMA stands out as support
Data from Cointelegraph Markets Pro and TradingView followed a BTC price uptick into the day’s Wall Street open.
BTC/USD managed $26,226, marking its highest level since Aug. 25 and fully compensating for the weakness seen overnight.
News that China had cut tax on stock trading by 50% appeared to buoy U.S. futures into the open. The S&P 500 and Nasdaq Composite Index subsequently opened up 0.6% and 0.7%, respectively.
$BTC still in a 3 day composite but has shown signs of absorption below. I wish it was liquid enough like the ES or NQ to simply justify saying "Hold 26.1 and those singles at 26275 get cleaned up"
— HORSE (@TheFlowHorse) August 28, 2023
Strong drive off the open for stocks.
It's Monday, so not looking to do anything… pic.twitter.com/6ObqBLIx5z
Eyeing the trading landscape for the coming week, Michaël van de Poppe, founder and CEO of trading firm Eight, flagged the 200-week exponential moving average (EMA) at around $25,700 as a key support zone to protect.
“First of all, the 200-Week EMA lies beneath us. It’s at $25,650 (Bitstamp) or $24,750 (Binance). The conclusion is, you don’t want to drop beneath that level and you’d preferably want to mimic 2015-2016 sideways period,” he wrote in part of a post on X (formerly Twitter).
“If the 200-Week EMA sustains, conclusions are that we’re bottoming out here and we are potentially getting a massive entry point. If it’s lost, I’d be looking at a case of $19,500-21,500 as the next big entry point and final capitulation. On the lower timeframes and over the week, it’s still possible to sweep below the 200-Week EMA. As long as we don’t lose the level.”
Van de Poppe continued that order book liquidity “most likely” resided below the 200 EMA.
“In that regard, a sweep of that area is the most likely outcome,” he wrote.
“Two strategies can be deployed: 1 - Sweep at $25,750 for an aggressive long entry towards the other side of the range (entry can only be taken after the sweep and when $25,750 is reclaimed). 2 - Sweep of $25,200 towards $24,700-25,000 (the 200-Week EMA on Binance) and bullish divergences on higher timeframes. That’s the golden trade and could be the start of a reversal. However, $25,750 should be reclaimed in the bounce, otherwise this trade could be invalid/stopped out.”
Popular trader Titan of Crypto meanwhile highlighted $25,900 as a prominent zone of interest.
“$25,900 is the level to watch,” he summarized in part of X analysis.
#Bitcoin $25,900 is the level to watch
— Titan of Crypto (@Washigorira) August 28, 2023
Kijun at $25.9k supported the #BTC price once more on the weekly timeframe. That's the level to watch.
If it holds, I won't be surprised to see a pullback to Tenkan at around $28.4k. pic.twitter.com/VDcJQczDwc
Bitcoin RSI stays “very low” for second week
Elsewhere, fellow trader Pheonix referenced persisting low levels on Bitcoin’s relative strength index (RSI) on lower timeframes.
Related: September ‘crash’ to $22K? — 5 things to know in Bitcoin this week
As Cointelegraph reported, depending on the timeframe in question, these reached levels not seen in five years after the 10% BTC price dip ten days ago.
“RSI still very low, for 1.5 weeks already now,” part of their X commentary on Aug. 28 read.
“7/8 times it went below 25 the last years, corresponded to the (local) bottom & a 30% minimum rise followed.
Further analysis showed the one exception to the rule coming in September 2019.
#Bitcoin RSI still very low, for 1.5 weeks already now
— Phoenix (@Phoenix_Ash3s) August 28, 2023
7/8 times it went below 25 the last years, corresponded to the (local) bottom & a 30% minimum rise followed
Most often $BTC gained more % in value
1 fail: Sep '19
4 local bottoms: Nov '19, May '21, Jan '22 & June '22… https://t.co/2yNxDStkD8 pic.twitter.com/PA4nVJkdTB
The RSI attempts to measure when an asset is overbought or oversold at a given price point.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
