Bitcoin - Mixed Signals In A Ranging Market

Ranging Market

On the whole, Bitcoin has been providing some great trading opportunities over the past few months. However, of late, it seems as if BTC is very much undecided about its next move. Bitcoin has been ranging between $27K and $28K for a couple of weeks now. Volatility has been lost, and any trade now is a rather risky move, in my opinion. Historically, a tight trading range always precedes a significant move.

The problem, however, is trying to identify the direction. Usually, confluence will help to discern the direction with the highest probability of success. However, BTC seems to be throwing out quite a mixed bag of signals. This type of market condition is one that I usually choose to avoid. I prefer to exercise reactionary trading. As mentioned in a previous article, every big move has a countermove.

The $30K level is proving to be rather stubborn in terms of resistance. I think many expected this, myself included. However, the rejections are not severe, allowing BTC multiple attempts to try and breach the level. The chart below reveals how stubborn this resistance level is.

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Just above $30K is where BTC was hovering for a while prior to the heavy correction that dragged the asset all the way down to $15.8K. It stands to reason that this will be quite a challenging area, especially as the volume is not really the greatest either. The resilience of the stock market is also assisting in providing BTC with a “lengthy window” of opportunity. Weekend volume is however generally unimpressive.

Volatility usually tends to strike at the close of the weekend, ultimately setting the tone for the week ahead. Returning to the chart above, the RSI is quite oversold, compounded by shrinking volume. However, bullish sentiment and momentum keep pushing to try and pierce the $30K zone.

Conclusion

This is somewhat of a dangerous zone to be trading. Personally, I am waiting for a close above $30K, which would then open up the possibility of $34K and even $38K. On the other hand, a rejection at this point could send BTC back to $24K in the immediate short term.

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Disclaimer

First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.

This article was first published on Sapphire Crypto.

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