The latest Bitcoin correction might have many investors worried, but it is actually good for the upcoming rally. Bitcoin saw green candles for 8 continuous days, and this pushed the RSI to 70 on the daily chart. The markets were also overbought, and the fear and greed index showed greed. All these are not good signs for a rally. So, this correction was a healthy way to retest previous resistance turned support and reset some of the metrics.
The correction is good!
Bitcoin has retested critical levels and bounced back above $46k, which is a great sign. On the daily chart, it made a low of $44.2k, where we have the EMA 20, which provided support and pushed the price above EMA 200 at $45.2k. The daily close was above both these levels, which is bullish. The RSI has also reset a bit and the fear & greed index has fallen from greed to neutral.
The retesting of previous resistances and bouncing back also increased the belief in the rally. In case of a correction, later on, we will know that these levels can hold and provide support. However, it is important that the price doesn’t move below $45k again and again. Till we stay above this resistance on the daily and weekly close, we will be good to move to higher levels.
What’s next?
On the weekly chart, we have already moved past the EMA 2o. However, there is a need for closing above the MA 50 at $45.5k this week. Tomorrow’s close will be important as it will also confirm the bullish movement on the weekly charts. The price also needs to break the $47.3k resistance, which has rejected the price after recovery from yesterday’s correction.
The final barrier will however be the 200-day moving average at $48.2k, which bulls were not able to clear in one go. I think we will be able to move past it this time, but for that, tomorrow’s weekly close will be critical.
Depending on the market sentiment and movements, a correction can also be good for a rally. Do you agree with me that the latest Bitcoin correction is good and will give this rally more power? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: 19 million Bitcoins have been mined: Only 2 million left now.
