Is Bitcoin Poised To Regain Important $25,000 Psychological Level? Here's What To Watch

Zinger Key Points
  • Bitcoin has been consolidating under the important $25,000 psychological resistance level.
  • The crypto is trading in an uptrend, making it likely Bitcoin may tackle the level over the next few days.
Is Bitcoin Poised To Regain Important $25,000 Psychological Level? Here's What To Watch

Bitcoin BTC/USD was trading slightly lower during Monday’s 24-hour trading session after a second rejection near the $25,000 level. During Sunday’s 24-hour trading session the crypto also attempted to break up over the important psychological level and failed.

Bitcoin has been consolidating under this important level for the last five trading days and although the crypto hasn’t yet held above the level, Bitcoin is trading in a clear uptrend on the daily chart.

An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods.

Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.

Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.

A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.

In an uptrend, the "trend is your friend" until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:

  • Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on the higher low.
  • Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low, indicating a reversal into a downtrend may be in the cards.

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The Bitcoin Chart: Bitcoin’s most recent higher high within its uptrend was printed on Monday at $25,214 and the most recent confirmed higher low was formed at the $23,600 level on Aug. 12. On Monday, Bitcoin may have created its next higher low within the pattern at the low-of-day.

  • If the uptrend is set to continue, Bitcoin is likely to trade higher on Tuesday, to perhaps form another consecutive higher high. If the crypto breaks down below the most recent confirmed higher low, the uptrend will be negated and a downtrend may be in the works.
  • On Monday, Bitcoin was working to print a shooting star candlestick on the daily chart, which suggests lower prices may come during Tuesday’s session. The second most likely scenario is that Bitcoin may form an inside bar pattern on the daily chart as the crypto continues to consolidate.
  • Bullish traders want to see Bitcoin hold above the eight-day exponential moving average (EMA), which has been guiding the crypto higher since July 27. The uptrend has also caused Bitcoin’s eight-day EMA to cross above the 21-day, which is bullish. A loss of the eight-day EMA would suggest a warning for bullish traders.
  • Bitcoin has resistance above at $24,206 and $25,772 and support below at $22,729 and $19,915. There is also the important psychological resistance above at $25,000 and below at $20,000.

See Also: Why Bitcoin-, Ethereum- And Litecoin-Related Stock Bitfarms Is Popping Off

Photo via Shutterstock. 

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