Bitcoin traders pinpoint support levels as BTC price taps $26.2K

August 28, 2023 anon Bitcoin
Coinmama
Bitcoin traders pinpoint support levels as BTC price taps $26.2K
Blockonomics

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Bitcoin (BTC) recovered its weekly close losses on Aug. 28 as risk assets rose on China tax cuts.

BTC/USD 1-hour chart. Source: TradingView

BTC price 200-week EMA stands out as support

Data from Cointelegraph Markets Pro and TradingView followed a BTC price uptick into the day’s Wall Street open.

BTC/USD managed $26,226, marking its highest levels since Aug. 25 and fully compensating for weakness seen overnight.

News that China had cut tax on stock trading by 50% appeared to buoy U.S. futures into the open. The S&P 500 and Nasdaq Composite Index subsequently opened up 0.6% and 0.7%, respectively.

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Eyeing the trading landscape for the coming week, Michaël van de Poppe, founder and CEO of trading firm Eight, flagged the 200-week exponential moving average (EMA) at around $25,700 as a key support zone to protect.

“First of all, the 200-Week EMA lies beneath us. It’s at $25,650 (Bitstamp) or $24,750 (Binance). The conclusion is, you don’t want to drop beneath that level and you’d preferably want to mimic 2015-2016 sideways period,” he wrote in part of an X post.

“If the 200-Week EMA sustains, conclusions are that we’re bottoming out here and we are potentially getting a massive entry point. If it’s lost, I’d be looking at a case of $19,500-21,500 as the next big entry point and final capitulation. On the lower timeframes and over the week, it’s still possible to sweep below the 200-Week EMA. As long as we don’t lose the level.”

BTC/USD annotated chart. Source: Michaël van de Poppe/X

Van de Poppe continued that order book liquidity “most likely” resided below the 200 EMA.

“In that regard, a sweep of that area is the most likely outcome,” he wrote.

“Two strategies can be deployed: 1 – Sweep at $25,750 for an aggressive long entry towards the other side of the range (entry can only be taken after the sweep and when $25,750 is reclaimed). 2 – Sweep of $25,200 towards $24,700-25,000 (the 200-Week EMA on Binance) and bullish divergences on higher timeframes. That’s the golden trade and could be the start of a reversal. However, $25,750 should be reclaimed in the bounce, otherwise this trade could be invalid/stopped out.”

BTC/USD annotated chart. Source: Michaël van de Poppe/X

Popular trader Titan of Crypto meanwhile highlighted $25,900 as a prominent zone of interest.

“$25,900 is the level to watch,” he summarized in part of X analysis.

Bitcoin RSI stays “very low” for second week

Elsewhere, fellow trader Pheonix referenced persisting low levels on Bitcoin’s relative strength index (RSI) on lower timeframes.

Related: September ‘crash’ to $22K? — 5 things to know in Bitcoin this week

As Cointelegraph reported, depending on the timeframe in question, these reached levels not seen in five years after the 10% BTC price dip ten days ago.

“RSI still very low, for 1.5 weeks already now,” part of X commentary on the day read.

“7/8 times it went below 25 the last years, corresponded to the (local) bottom & a 30% minimum rise followed.”

Further analysis showed the one exception to the rule coming in September 2019.

RSI attempts to measure when an asset is overbought or oversold at a given price point.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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