This is a daily technical analysis of the Coindesk analyst and technician of the approved market Omkar Godbole.
The bitcoin bruising advance (BTC) encountered a resistance zone of more than $ 88,000, marked by crucial levels that could do or break the current recovery rally.
The first and perhaps the most critical level of the resistance cluster is the simple 200-day mobile average (SMA) at $ 88,356. SMA is largely considered as a key indicator of long -term momentum. At the beginning of this month, Coinbase institutional analysts called for the break in the drop in SMA 200 days in March a sign at the start of a winter of potential crypto.
Thus, a new decision above the 200-day SMA could be made to represent a renewed bullish change of the momentum.
Such a movement would trigger a double escape, because the upper end of the Ichimoku cloud is located near the 200 -day SMA. A movement above the Ichimoku cloud would also reflect a bullish change in the momentum.
Developed by a Japanese journalist in the 1960s, the Ichimoku cloud is an indicator of technical analysis which offers a complete view of market dynamics, support and resistance levels. The indicator includes five lines: the scope of direction A, scope B, the conversion line or Tenkan-Sen (T), the base line or Kijun-Sen (K) and a late fence price line. The difference between management of management A and B forms the Ichimoku cloud.
The third and last level forming the resistance cluster is the summit of $ 88,804 on March 24, from where the market dropped and dropped to $ 75,000.
A makeup resistance area?
The behavioral aspects of trading come into play when an asset approaches an area of resistance, in particular at key levels such as the 200 -day SMA and the Ichimoku cloud.
The theory of perspectives suggests that people are generally opposed to risk with regard to gains and the search for risks with regard to losses, known as “the effect of reflection”. Thus, as traders, people tend to be opposed to risk while locking profits and losing open professions.
This trend is amplified when an asset meets a significant resistance area. Traders who have entered the bitcoin market around $ 75,000, anticipating a rebound, may feel in a hurry to make profits as the price is approaching this resistance. Such a sale could, in turn, slow down pricing or even trigger a new slowdown.
Conversely, if Bitcoin successfully crosses the resistance zone, the fear of missing could encourage more merchants to make bullish bets, to further fuel the bruise and to push the higher price.
