Bitcoin recently broke through $40k after the 7-year bull trendline supported it. And now, after a short accumulation phase at $41.5k, it has moved past $42k and is now trading at $42.8k. This is important as $42k is critical support for Bitcoin, and we have acquired it again. The increase in Bitcoin’s price also correlates with the stock markets, as it has also increased recently.
Bitcoin moves past $42k
The $39.7k-$40k level is critical support on the downside for Bitcoin now. On the upside, we have resistance in the $43k-$46k price range as it gave solid support for Bitcoin during the crash. The markets are also cheering up as the price of Bitcoin has been moving up without any correction since the last week. It was oversold for a long time, and the bulls have finally taken control properly. But there are some matters of concern as well.
On the daily chart, if you take a look at the RSI, it is much higher than what it was when the price was at the same level a few weeks back. This could be forming a hidden bearish divergence, and we might see some correction before moving up again. So, as traders, it is good to be a little cautious at these levels.
An increasing number of hodlers and the fear and greed index
The number of Bitcoin hodlers has been increasing continuously, and this is a really bullish sign. Short-term hodlers are actually selling for profits or losses in a panic to ones who are controlling the markets and accumulating. This means that there is no reason to be bearish. At the same time, the fear and greed index is at 45 now, which is still at the fear level. Therefore, the direction of the market is unlikely to change in the future as well.
Should you buy now?
I am bullish here, but I think we might revisit $40k. Since there are still some concerning signs about Bitcoin’s price action, it is best to hold off buying for a while. And if you still think that Bitcoin could do well from here, then don’t use all of your funds at once and keep some for DCA in case there is a correction.
What are your thoughts as Bitcoin moves past $42k? And do you think there will be a correction here? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.