The price of Bitcoin has exploded after a phase of consolidation and pullback. It is currently testing a key resistance level and its reaction will likely determine the short-term future of the market.
The daily chart
On the daily timeframe, the price is retesting the $25,000 resistance level after a rejection and bearish pullback several weeks ago. Given the last day candle, the bullish momentum seems very high at the moment, and a break above the $25,000 level is the most likely scenario at this time.
Meanwhile, the 50-day moving average has also crossed the 200-day moving average on the upside recently, which is a very bullish signal and further increases the likelihood of a positive continuation above the $25,000 level. and towards the $30,000 area.
On the other hand, an unlikely rejection from the current zone could lead to a pullback towards the 50-day moving average located around the $21,000 mark.
The 4 hour chart
On the 4-hours chart, the price rose rapidly after recovering above the $22,500 mark and is edging the $25,000 resistance level.
Although the momentum is also very bullish over this timeframe, the RSI is cautious as it has moved deep into the overbought zone, showing values above 80%.
As a result, a retracement could be likely before breaking the $25,000 level on the upside. In case of a deep pullback, the $22,500 level could come into play again and keep the market going.
Bitcoin open interest
The price of Bitcoin has started to climb again after weeks of consolidation. The futures market is also experiencing a spike in activity, although this could be a worrying signal.
This chart illustrates the open interest metric, which shows the number of open positions in the perpetual futures market. Higher values of open interest would lead to greater price volatility.
Therefore, while it makes sense for futures traders to become more active as price appears to be bouncing back, investors should be wary of the recent sharp rise in open interest, which could lead to a long cascade of sell-offs and a further fall in prices in the short term.
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Cryptocurrency charts by TradingView.