- Bitcoin is riding a wave that has taken it just shy of $41,000, defying what was a shaky start to the month and looking set to have a great weekend.
- However, there are a few key factors to consider before traders become long-term bullish, according to analysts, including whether BTC can break above $42,500.
Since it dropped below $30,000 on July 20th, Bitcoin has staged an eye-catching comeback that has now seen it trading just shy of $41,000. The top crypto has gained about 9 percent in the past 24 hours alone as per our data, defying what had initially looked like a shaky start to the new month. However, despite the positive movement, many analysts are still not convinced BTC can maintain its momentum and have outlined a few key factors that will determine where it ends up after the weekend.
As per our data, Bitcoin is trading at $40,940 at press time.
The rest of the market is on the green today as well, with the king of altcoins, Ethereum, gaining 8.4 percent in the past day to trade at $2,780. Uniswap, Theta Monero and the FTX token have all gained above 10 percent, with Internet Computer (ICP) standing out with an 18.91 percent gain.
Key price levels to watch for Bitcoin
As BTC makes its price rally, analysts are watching some key levels to see if the crypto can maintain its current rally. For Michaël van de Poppe, Bitcoin has to trade above $42,500 before traders can ape in. The Amsterdam-based trader, who is better known to his fans as Crypto Michaël, believes that if Bitcoin can trade above this level, then traders should start placing long BTC positions.
In a price analysis video to his 110,000 YouTube subscribers, Van de Poppe stated, “I refuse to become bullish on Bitcoin at this stage unless we are able to flip this level for support.”
The trader and analyst believes that if Bitcoin can breach the $42,500 level, the next contentious price level will be at $45,000, and by then, there will be enough momentum for the cryptocurrency to stage serious movement.
If we have a breakout like this in which we rally towards $45,000 and flip this zone, then, of course, I’m going to look for longs, but right now, in this structure, I’m not interested at all.
For other analysts, the most critical thing to look out for is whether Bitcoin can breach its 200-day simple moving average which for now stands around $45,000. Breaking past this would clear the crypto’s downtrend since April and set the crypto up to challenge $50,000 and above.
It is, however, a bit worrying that Bitcoin’s relative strength index (RSI) is declining from overbought levels. This could encourage profit-taking by traders, especially when the crypto approaches resistance levels. Craig Erlam, a senior market analyst at OANDA is one of those that believe Bitcoin may suffer from profit-taking, especially over the weekend, which could effectively kill the momentum it’s picked over the past few days.
On the other hand, there are those who believe that despite the short-term uncertainty, we are headed to $250,000. One trader pointed out that Bitcoin had bottomed at $29,000 and is now on its way back to $64,000, its current all-time high. If it does hit this level, we are going to see a 390 percent rise to $250,000.
We got the 60-64k
We got the 29k bottom
Imo if we do get above 64k. We are going to 200-250k
That's only a 3x above the prev ath's. It's not wild when you think about what #Bitcoin is, and it's future with global adoption
— Pentoshi Wont DM You (@Pentosh1) August 5, 2021