On August 28, Bitcoin (BTC) recovered its losses from the previous week's finish as risk assets climbed due to China's tax reduction.
200-WEEK EMA OF THE BTC PRICE STANDS OUT AS SUPPORT
An increase in bitcoin's price before the opening of Wall Street was accompanied by data from Cointelegraph Markets Pro and TradingView.
BTC/USD reached $26,226, marking its highest since August 25. This entirely compensated for the decline that was experienced throughout the previous night.
The report that China had reduced taxes on stock trading by fifty percent supports U.S. futures entering the open. After that, consecutive opening prices for the S&P 500 and Nasdaq Composite Index were higher by 0.6% and 0.7%, respectively.
When looking ahead to the trading environment for the coming week, Michael van de Poppe, founder and CEO of trading business Eight, identified the 200-week exponential moving average (EMA) at approximately $25,700 as an important support zone to protect."To begin, the 200-week Simple Moving Average is located below us. It trades at $25,650 on Bitstamp and $24,750 on Binance. The conclusion is that you do not want to fall below that level, and you would ideally want to replicate the 2015-2016 sideways phase," he stated as part of a post on X (then known as Twitter).
"Conclusions are that we're bottoming out where we are, and we are potentially getting a massive entry point if the 200-week EMA continues to hold," the analyst said. If I were to lose, I would look at a case between $19,000 and 21,500 as the next major entry point and the point at which I would finally capitulate. The price may drop below the 200-week exponential moving average on the shorter timeframes and during the week. As long as we don't drop down a level."
Van de Poppe said that order book liquidity's "most likely" location was below the 200 exponential moving average.
"In that regard, a sweep of that area is the most likely outcome," he wrote. "Two strategies can be deployed: a targeted search of the area and a general search of the surrounding areas." 1: Sweep at $25,750 for an aggressive long entry towards the opposite side of the range (entry can only be taken after the sweep and when $25,750 is reclaimed); this allows for a long entry towards the other side of the range. 2 - A move of $25,200 closer to the region between $24,700 and 25,000 (which corresponds to the 200-Week EMA on Binance), as well as bullish divergences on higher timeframes. That is the deal of the century and may mark the beginning of a trend reversal. On the other hand, $25,750 needs to be retrieved during the bounce; if not, this trade can be invalidated or stopped.
Titan of Crypto, a well-known trader, pointed out that $25,900 is a significant zone of interest.
He said, "$25,900 is the level to watch," as part of the X analysis.
Bitcoin RSI Remains "Very Low" for the Second Week
In another context, Pheonix, a fellow trader, mentioned that the relative strength index (RSI) for Bitcoin's lower timeframes remains persistently low.
After the 10% drop in the price of bitcoin ten days ago, these reached levels that had not been seen in five years, according to a report by Cointelegraph. Depending on the timeframe, these reached levels that had not been seen in five years.
As part of their X comments on August 28, it stated that "RSI still very low, for 1.5 weeks already now," and that "7/8 times it went below 25 the last years, corresponded to the (local) bottom and a 30% minimum rise followed."
Additional research revealed that there would be one and only one exception to the norm in September 2019.
The Relative Strength Index (RSI) is a technical indicator determining if a security's current price represents an overbought or oversold situation.
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