Bitcoin Rests Tentatively Above $31,000, Bull Rally Or Trap?

Best Owie

3 years ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

The price of bitcoin has been doing significantly well compare to where it was about a week ago. It has now recovered above a highly coveted point, returning some faith back into the market. However, the position where the digital asset currently resides is one that is unstable. Even though it seems to have found its footing above the $31,000 level, there is still the question of what this recovery actually means in the short term.

Fakeout Or Breakout?

It is important to note that the price of bitcoin had trended for a long time between $29,000 and $30,500. It spent quite some time here as the cryptocurrency had consolidated for the longest time. With its most recent recovery, it had broken out of this consolidation point. But there hasn’t been enough by the way of recovery to simply be sure that this is one that will continue.

Indicators point to this being a potential critical turning point for the price of bitcoin. Where it goes from here will likely determine the path of the digital asset for the rest of the month. For the cryptocurrency to really establish this as a breakout position, it would need to range upwards and break, its next significant resistance point which lies at $34,500.

Now, given that bitcoin is still languishing at the $31,000 territory, a rally towards $34,500 would need to be accompanied by tremendous momentum from the market. However, if this happens, then the digital asset can establish support at the same point that provided a good cushion at the beginning of the year.

BTC in critical position | Source: Arcane Research

As for a reversal, a potential takeout would have serious implications for the crypto market. Granted, the digital asset has managed to establish great support at $29,000, as evidenced by market movements in the last few weeks. However, a break below $29,000 will likely see bitcoin test the $25,000 support level before it begins another recovery trend.

Bitcoin Turning Bullish In Short-Term

The charts show a highly favorable short-term price of bitcoin but that is only dependent on how well it holds on to its current price. Since its recovery above $31,000, the digital asset is now comfortably trading above its 20-day moving average. This points to a slowdown in the sell-offs in the market and possible recovery towards 50-day moving average levels.

BTC continues recovery trend | Source: BTCUSD on TradingView.com

Losses in bitcoin have also slowed significantly since it hit its ninth red weekly close. This losing streak has been its longest in history and has tired even sellers out. A welcome development for the market.

If this is the case and sell-offs continue to drop, the reversal could be a potential breakout that could set the market on another bull rally, ending the losing streak.

Bitcoin is trading at $31,557 at the time of this writing. It is headed for its first green close in more than two months.

Featured image from MARCA, charts from Arcane Research and TradingView.com

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

Best Owie

Best Owie is a seasoned managing editor with a wealth of experience currently serving as the Managing Editor at NewsBTC. Best is a highly skilled professional with a track record of producing engaging and informative content. With a keen eye for detail and a passion for accuracy, Best is committed to ensuring that each article published meets the highest standards of quality.

Best has over six years of experience in the crypto industry and has overseen the creation and publishing of thousands of articles over the years. Best is always abreast of everything that is going on in the crypto industry in order to create and curate the most relevant content for readers. This shines through in Best’s publications, which are always clear and concise, enabling easy reading and understanding for all.

Best is also an avid learner and advocate for new technology. This has seen Best dive into topics in areas such as decentralized finance (DeFi), non-fungible tokens (NFTs), Layer 2 blockchains, etc. In addition to this, Best is a vocal member of the crypto community across various social media platforms such as X and Reddit. Best’s work garners tens of thousands of readers monthly, who rely on the information in these publications to keep up-to-date with everything happening in the crypto community.

Best’s articles explore breaking news, intricate systems such as yield farming, liquidity pools, and other decentralized finance (DeFi) systems. This is because Best understands the importance of information to gaining financial freedom and believes that everyone should have access to this information.

Best also believes in leveraging the blockchain for philanthropy to create the most positive social impact. This involves work with charitable organizations focused on financial literacy and education. With each article, Best lends a voice to important issues such as a more financially inclusive future, transparent systems for growth and development, and technology that is not self-serving but one that serves all of humanity.

When not curating engaging content, Best can be found reading a book with a cup of hot chocolate, enjoying a Netflix series, or exploring the outdoors with Green - the world’s most quiet and well-behaved Husky. Best’s interests also span other industries such as art, finance, and security, attending seminars and conferences in not just the crypto industry but other industries as well.

As an animal lover, Best is also involved with charities for animals, local shelters, and rescues. Best is also involved in local events that promote inclusivity, such as being a prominent member of hiking clubs and a cycling club, as well as being a part of a very happy group of animal lovers.

Best is a true professional in every sense of the word, with an exceptional dedication to producing high-quality work. This shines through in Best's work on and off the clock. These include advocating for inclusive crypto education for all, the impact of financial illiteracy, and the benefits of adopting new technologies such as cryptocurrencies. Best’s prolific career in the media industry is a testament of how hard work and dedication pays.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.