After the bears spotted renewed selling pressure at the $47.5k level in late March, the past two months have been a constant bid to break Bitcoin’s chains [BTC] 20 EMA (red).
While the short-term development showed a sideways market, BTC HODLers were clearly keen to defend the 16-month bottom at $28.8K.
Given the confluence of hurdles at the $30.8k level, BTC could continue its sluggishly tight phase. Should any factors worsen sentiment, a close below the current pattern would present a short selling opportunity.
At press time, BTC is trading at $30,526, up 5.18% over the past 24 hours.
BTC daily chart
Source: TradingView, BTC/USD
From a slightly conservative standpoint that comes from the long-term downtrend, BTC could see a sustained tight streak in the $28.8k-$30.8k range in the coming sessions.
For the past three weeks, the king coin has formed a rectangular bottom on its daily chart as well as lower timeframes. Because of this, the Bollinger Bands (BB) entered a squeeze phase.
As BB’s upper band coincided with the 23.6% Fibonacci level near the 20 EMA, the $30.8K level represented a variety of resistance. Meanwhile, price action was hovering near the BB’s “expensive” side.
Any closure below the rectangle would make room for a short opportunity. In this case, the take profit levels would be in the $25,000 to $26,000 range.
However, in a relatively unlikely case of bearish invalidation, a close above the pattern would open up a 10% upside opportunity. As the price closed above BB’s baseline, buying pressure has seen a decent surge in the last 24 hours.
Reason
Source: TradingView, BTC/USD
The daily Relative Strength Index (RSI) was yet to break above equilibrium and set an uptrend for the day. But gaining the four-hour timeframe, the RSI projected overbought readings. This increases the chances of a short-term pullback from the 23.6% level on the chart.
Although the +DI barely crosses the -DI, the directional trend of BTC is [ADX] seemed pretty weak.
Conclusion
The bears are still in control of the broader trend. Looking at the current barriers in the $30.8 area, BTC’s bears may amplify the coin’s consolidation tendencies.
A close below the square bottom could offer a 10% short chance on the downside.
Should sentiment improve enough for buyers to bounce back, investors/traders will need to watch for a close above the pattern to capitalize on any near-term gains towards the 38.2% level.
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