Bitcoin ‘Doji’ points to bullish reversal scenario as BTC holds $36K support

Bitcoin (BTC), which halfway paints a indecisive “Doji” candle on its weekly chart, is still able to regain its bullish bias.

Bitcoin’s price fall to below $33,000 this week was a result of it forming a lower wick. This suggests that the drop was bought by bulls. BTC’s price reached $38,960 on January 27, after a sharp retracement. The bulls were unable to hold the top for the week, which led to another wick but also pointed to the upside.

BTC/USD weekly price chart featuring Doji candlestick. Source: TradingView

Since then, the BTC price has corrected to close to its weekly opening rate at $36,200. It has created a “Doji” transitional candlestick that represents indecision between bulls and bears. Doji candlesticks can signal a reversal in price direction if they are found near the bottom of the trends.

The $30K support stays

Since Nov. 2021, when Bitcoin reached its record high of $69,000, Bitcoin has been trending lower. The cryptocurrency lost more than half of its profits and even fell below its 50-week exponential moving mean (EMA; the red wave), which is a crucial support level.

Bitcoin’s strongest interim support is $30,000, which has been a stumbling block to cryptocurrency’s downfall attempts since January 2021. The level helped attract accumulators, which in turn led to the BTC price climbing to a record high in May-July 2021.

Crypto Batman, a pseudonymous analyst in the market, stated that if support at $30K is held, it’s possible that we will see an upward trend resuming.

BTC/USD weekly chart. Source: TradingView

A Doji formation that is located ahead of the BTC price reaching $30,000-support indicates a weaker bearish sentiment.

Bearish outlook

If Bitcoin’s price falls below $30,000., the bullish outlook for Bitcoin could be diluted.

Bitcoin’s weekly relative strengths index is now at 38. It is still moving towards its oversold territory of 30. This shows that Bitcoin’s price has plenty of room to fall in the coming sessions, if not until it reaches $30,000.

BTC/USD weekly chart. Source: TradingView

Bitcoin is at risk of falling to its 200-week exponential moving mean (200-week EMA, the blue wave in this chart) below $25,000 while it closes below $30,000 This is due in part to the history of the wave ending bearish cycles in 2018 & 2019, which were followed up by sharp retracements that led to new record highs.

A downside scenario is based on fundamentals

Due to the uncertainty surrounding the Federal Reserve’s 2022 rate hike plans to combat inflation, Bitcoin fluctuated between extreme highs or lows this week. The gains in cryptocurrency fell after the U.S. central banking confirmed it would raise interest rates mid-March.

Jerome Powell spoke out after the statement to confirm that the Fed is likely to raise rates at every policy meeting throughout the year. The Fed Chairman admitted that inflation had worsened in the months since December’s policy meeting. This underlines the fact that supply chain problems may not be resolved before 2022.

Now, I am reading the Powell transcript. This was a great question from @colbyLsmith. Powell’s answer was helpful in understanding the FOMC’s thinking. pic.twitter.com/KDizwQf4Jr
Joe Weisenthal (@TheStalwart), January 26, 2022

Bitcoin fluctuated in the hours before the Fed’s statement, and during Powell’s conference the following day on Jan. 26. After the central bank announced its policy decision, Bitcoin briefly rose to nearly $39,000 but then began falling shortly after Powell spoke to journalists.

CryotoBirb, an independent market analyst, downplayed the concerns surrounding Fed’s tightening policies and stated that it would not adopt a “destructive approach towards financial markets.”

Related: Is there a bottom? Data shows that Bitcoin derivatives are entering the “capitulation” zone.

Chartists noted that a Fed-led stock-market collapse would be bad for politicians. This may leave the central banks with the option of only bringing “short-term bearish consequences” to risky markets. Then, strong medium-term growths will follow.

He said, “It’s also worth mentioning that Bitcoin has just taken advantage of the equities and while stocks fell, Bitcoin took off to a positive.”

com. You should do your research before making any investment or trading decision.
https://cointelegraph.com/news/bitcoin-doji-points-to-bullish-reversal-scenario-as-btc-holds-36k-support

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