Bitcoin prices hit their latest one-month high today. (Photo Illustration by Chesnot/Getty Images)
Bitcoin prices continued to climb today, building upon their recent gains and rising to a fresh, one-month high.
The cryptocurrency, which has the greatest total market value of any digital asset, appreciated to more than $24,280 earlier on TradingView.
At this point, it had rallied 38% from the recent low of approximately $17,600 that it reached last month, additional TradingView figures showed.
Further, bitcoin was trading at its loftiest value since June 13.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Following these latest price increases, several analysts offered their perspective on what the digital currency might do next.
Some of these market observers, for example, provided technical analysis, looking at specific indicators, as well as key levels of support and resistance, to get a better sense of the cryptocurrency’s future behavior.
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‘An Impressive Move For Bitcoin’
David Keller, chief market strategist at StockCharts.com, supplied this kind of input, emphasizing the importance of the recent rally.
“This is an impressive move for Bitcoin,” said Keller, noting that it is “finally breaking out of a consolidation pattern in the $18,000 to $22,000 range which has held for the last four weeks.”
“Bitcoin is now trading above its 50-day moving average for the first time since early April, suggesting a rotation from distribution phase to accumulation phase,” he stated.
“The momentum patterns have improved, with an RSI above 60 which indicates strong buying power,” said Keller.
Key Support/Resistance Levels
The market expert identified some specific price levels that technical traders should watch.
“I would expect further upside to around $30,000 which was the most recent price congestion area back in May-June,” he stated. “This would also represent about a 38.2% retracement of the March to June selloff.”
“On any pullback, look for Bitcoin to hold the 50-day moving average to confirm a bullish outlook,” said Keller. “If Bitcoin would fail to hold the $22,000 level, there could be further downside potential to the July lows around $20,000.”
Collin Plume, CEO and founder of My Digital Money, also spoke to this matter.
“The market and Bitcoin have moved strangely in sync this year. It’s not surprising to see Bitcoin recover,” he stated.
“It might find $23,000 to $26,000 to be its key support level for a couple of months with some isolated swings,” said Plume.
He added that “$30,000 will be the resistance level, and bitcoin will attempt to break through those wild swings.”
“But once it crosses $30,000 in one of those swings, it will be a slow but steady climb back to its $60,000 glory,” Keller predicted.
Brendan Playford, the founder of Masa Finance, a decentralized financial platform, also highlighted some important technical levels.
“Resistance seems to be hovering around $24,000 – above the weekly 200 SMA,” he stated. “If that is firmly broken and turns into support, then we could very likely see a big break up to $28,000.”
“However, if $22,600 doesn’t hold, then $20,000 would serve as support,” Playford added.
Bitcoin In ‘The Bottoming Zone,’ Says Analyst
The world’s most prominent digital currency may be in a place that gives market observers significant incentive to invest, according to analyst Eliézer Ndinga, who highlighted specific indicators.
“From a high time-frame perspective, it seems that Bitcoin is in the bottoming zone,” said Ndinga, who is the director of research for 21Shares, which offers cryptocurrency related exchange-traded products, or ETPs.
He cited bitcoin’s Reserve Risk indicator, which is provided by Glassnode.
“Reserve Risk is a cyclical indicator that tracks the risk-reward balance relative to the confidence and conviction of long-term holders,” the Glassnode Academy website explains.
“It provides a long-term cyclical oscillator that models the ratio between the current price (incentive to sell) and the conviction of long term investors (opportunity cost of not selling).”
Ndinga described it a bit more simply. “This indicator is used to assess the confidence of long-term holders relative to the price of BTC at any given point in time,” he noted.
“Currently, it is close to an all-time low.”
This is worthy of mention because a low value for the oscillator can point to relative undervaluation, offering investors appealing conditions to enter the market.
The graph below helps display the history of bitcoin’s Reserve Risk indicator.
This graph depicts bitcoin’s Reserve Risk indicator, which recently fell close to an all-time low.
The market observer also cited bitcoin’s Net Unrealized Profit/Loss (NUPL), which measures the net profit or net loss of the digital currency’s network.
The value of this indicator, which can be positive (indicating a state of net profit) or negative (pointing to a state of net loss), can help investors get a better sense of whether it is a good time to buy or sell.
“Depending on whether we are in a bull market or a bear market, the level of the NUPL ratio categorizes investor sentiment in 5 brackets, as you can see at the bottom of this chart,” said Ndinga.
This chart illustrates how much the bitcoin network is either in net profit or net loss.
“NUPL is currently in the capitulation zone and even went lower than the COVID bottom in 2020,” he stated.
As a result, this may be a good time for investors to accumulate bitcoin.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.
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