Neutral Bitcoin Price Action Flips Bullish With Break of This Key Level

Tony "The Bull" Severino

5 years ago

3 mins read

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After Bitcoin price fell from $10,000 to under $4,000 in one short month, the ultra bearish, panic-induced price action has finally settled into a neutral state.

However, if bulls can break above this key level and hold it as support, the price action will flip bullish and likely go on to target $7,800.

Neutral Price Action Ready to Flip Bullish With Break Above $6,600

Bearish Bitcoin traders have been having a field day after the leading cryptocurrency by market cap failed to produce a significant and sustainable rally after breaking above $10,000.

Not only did the surge in price fail to spark FOMO amongst retail investors, some of the largest Bitcoin holders finally cashed out ahead of a potential recession, and caused a catastrophic and historic selloff.

In less than one month’s time, Bitcoin price fell from over $10,000 to under $4,000. At the low, the price of the cryptocurrency bounced off $3,800 and quickly grew by over 80% to nearly $7,000 before falling back down again.

Since then, the asset has been ranging, causing the price action to turn neutral until a breakout to the up or downside occurs and caused traders to take positions and ride the wave to the next trading range.

A break below the previous low would be enough to cause Bitcoin price to turn back to ultra bearish, potentially hinting at lows much below as targets.

However, if bulls can reclaim $6,600, it could cause spark a surge of buyers and a push of Bitcoin price to above $7,800.

Neutral here

Crack monthly vwap at 6630 and I'd target 7.8 though$BTC pic.twitter.com/J7ZFjsvzs0

— CryptoTrooper (@CryptoTrooper_) March 31, 2020

What’s a VWAP and Why Would Breaking It Take Bitcoin Price to $7,800?

$6,600 is a particularly critical level for bulls to reclaim, as it’s the monthly VWAP – or volume-weighted average price.

The volume-weighted average price is a benchmark traders use to give price action an average across the day that’s based on both price and volume together. Not only does this ensure that traders are taking positions that make sense according to trading volume, but it is a tool said to reduce transaction costs by minimizing market impact.

When price passes above or below the VWAP, it’s a signal that the trend behind the price movement is particularly strong, and could result in continuation. This tells traders not only when to take a position but increases the likelihood of a successful trade.

Given how effective the tool can be used in understanding the strength of an underlying trend, it’s clear to see why the level is particularly important for Bitcoin price.

The VWAP is currently at roughly $6,600. If bulls reclaim that level, it could be a signal that Bitcoin price will stage a strong recovery after a month of devastating price action.

Featured image from Shutterstock

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.