Bitcoin gains 12% to close in on $40,000 for the first time in two weeks, as analysts reveal two key levels

  • Bitcoin saw a spike on Sunday to come within touching distance of the $40,000 level after the Technoking of Tesla reignited his love for the crypto.
  • Analysts have revealed the two key levels that could shape BTC’s future in the short term, including breaching its 200-day simple moving average.

Bitcoin saw a spike on Sunday to come within touching distance of the $40,000 level after trading sideways in the previous week. The top crypto went as high as $39,746 as per our data to set a weekly high. Bitcoin’s spike came after Elon Musk reignited his love for Bitcoin, indicating that Tesla hadn’t discarded Bitcoin as a payment method completely and could still accept it under a few conditions. Tanzania’s president also indicated that the country will be looking at being more BTC-friendly in the near future.

At press time, Bitcoin is trading at $39,380, a 12 percent rise in the past 24 hours. The crypto gained as much as $4,190 in the past day, a rare event as weekends always tend to be bearish.

Bitcoin’s trading volume also spiked on Sunday, seeing a 30 percent rise to hit $43.7 billion.

ALSO READ: Elon Musk gives condition for Tesla to accept Bitcoin payments, retaliates that only 10% of holding sold

The two key levels for Bitcoin

At its current level, Bitcoin has two key levels that could determine its future in the near term. The first is $38,000, which according to one analyst must be turned into a support level before Bitcoin can break out. Rekt Capital, a renowned BTC analyst, recently revealed that the last time $38,000 was a support level was on February 7.

So while a breakout from this wedging structure would be exciting, it’s really important that $38K is turned into support This technical development would propel BTC into true breakout rally

Bitcoin chart courtesy of Rekt Capital

Bitcoin chart courtesy of Rekt Capital

The second level that’s crucial to Bitcoin, at least in the short term, is the 200-day simple moving average which stands at $42,000. While some have claimed that Bitcoin consolidating below this level indicates it could be ready to break out, trading insights platform Decentrader disagrees. In a recent insight, Decentrader’s Philip Swift cited this as the near-term resistance that BTC must breach in order to break out.

The fact that the price has now spent several weeks below the 200DMA is not a bullish sign. A weekly close below $32,000 would further dampen hopes of a quick bounce back into a bull market. However, closes above the 200DMA and 128DMA would bring a lot of confidence back into the market.

Decentrader pointed to other indicators that signal BTC being ready to break out. One of these is the spent output profit ratio (SOPR) which shows whether Bitcoin wallets are selling at a profit or a loss. Since BTC crashed from its all-time high, we’ve had a couple of weeks in which wallets were selling at a loss. However, data by the platform indicates that this has changed in the past few days, albeit slightly. (The green bars represent periods when wallets are selling at a loss.)

SOPR (Spent Output Profit Ratio) courtesy of Decentrader.

 

About Author

Steve has been a blockchain writer for four years, and a crypto enthusiast for even longer. He is most excited by the application of blockchain to solve the challenges facing developing nations.

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