Bitcoin has a clear path to $28,200; Heres’ Why

Biraajmaan Tamuly
Source: Pixabay

Bitcoin is on a roll at the moment. While sentiments are still bearish in the long-term, its weekly returns currently stand at 14%, which is surprisingly the highest weekly return in 2022. Although BTC underwent minor corrections over the past few days, a bullish case can be made that Bitcoin may end up testing $28,200 over the next few days.

Bitcoin 12-hour time frame

Source: Trading View

Bitcoin’s 12-hour chart is fascinating regarding how its bottom might be prevailing in the market. After dropping below $20,000 on three occasions, BTC finally moved above the $20,000 market and consolidated with bullish momentum. The triple bottom setup ended up breaking out in the positive direction.

Now, if the 1st resistance zone is observed, it was marked between $22,200 and $22,800 because it was a significant point of resistance. Breaching this range highlighted BTC’s current buying pressure, and the asset developed a better trend reversal.

Now, the recent correction comes into play perfectly because the bounce back is taking place from the former resistance zone($22,200-$28,200), which is now a possible support area. A more extended consolidation above this range further strengthens BTC’s plot for recovery.

But why $28,200?

Source: Trading View

The trading range between $22,800 and $28,200 should be relatively easy for Bitcoin to conquer because of a lack of activity. Trading volumes at any range indicate possible support and resistance, and since May, Bitcoin has had fragile trading volumes between the above price lengths. So, the possibility of Bitcoin recovering exponentially out here is pretty high. The visible Range(blue-yellow bars) highlights the lack of activity between the range mentioned above.

Another vital metric turned bullish is the relationship between EMA-50(Orange line) and SMA-50(Blue line). Bitcoin is currently hovering over both the exponential and simple moving averages, and EMA is leading SMA. Both these conditions are fundamentally bullish, which clears Bitcoin’s path towards $28,200.

External factors in play?

Reports regarding Tesla selling 75% of its Bitcoin could have created a little negative sentiment for the asset, but these sales did not occur over the past few days. So selling pressure should not be an issue at the moment unless it affects current retail momentum. As highlighted by Santiment, markets are yet to FOMO in the rally, which means most of the recovery is pretty organic and on-chain based.

Things are finally looking up for Bitcoin, but it is important to note that the industry is far from confirming a bullish rally. These are short-term recoveries, usually a part of long-term bear cycles.

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