Bitcoin 24-hour volatility is rising, why bulls could win the battle in the short-term

Image by: Edu Lauton – Unsplash

Bitcoin continues to trade sideways in a narrow range as regulatory pressure mounts in the US with two lawsuits against major crypto exchanges. The number one cryptocurrency by market cap may still see crab-like price action, according to an analyst, but bulls may pause in the near-term.

As of this writing, Bitcoin (BTC) is trading at $26,500 with a 2% gain in the last 24 hours. In the previous week, BTC recorded a 2% loss. In contrast, other cryptocurrencies in the top 10 by market cap saw similar price movements, with the exception of Binance Coin (BNB), which saw a 14% loss over the same period.

BTC price is moving sideways on the daily chart. Source: BTCUSDT trade view

Positive Outlook for Bitcoin Price?

According to analyst Ali Martinez, the price of Bitcoin could continue to rise. Over the week, the cryptocurrency has declined but remained above the critical resistance.

Despite the unfavorable and uncertain macroeconomic conditions and regulatory environment, investors in the crypto market continue to struggle to establish clear direction. In this regard, Martinez stated the following regarding the BTC price using the TD Sequential Indicator as shown in the chart below:

The hourly chart’s TD Sequential is providing a buy signal that could lead to a recovery of $BTC to $27,000-$27,300. Still, #BTC needs to avoid an hourly close below $26,360 as it could lead to a drop to $25,800.

According to the TD Sequential Indicator, BTC could see more gains. Source: Ali Martinez via Twitter

Despite the forecast, the uncertainty could be the most critical factor and make the buying sequence ineffective. A break above $27,000-$27,300 could indicate a bullish outlook for BTC traders in the near term.

Conversely, $26,000 and $26,300 are still key support levels as the 200-week moving average (WMA) sits in this area. Bulls need to defend this moving average to prevent the price from falling further, potentially to the $20,000 bottoms.

On the bright side, the spike in volatility over the previous trading sessions has helped the open interest (OI) clean up. According to a separate analysis, over $800 million in OI was wiped out as BTC drained liquidity both ways.

When OI is taken out and over-leveraged positions are closed, the market is often less compelled to trend in a single direction. A pseudonym analyst explained:

We’ve seen quite a bit of volatility over the past 48 hours. In total, we have seen over $800 million worth of open position loss over this period. High leverage has been extended to both sides. taken liquidity. To the place to determine the direction from here.

Cover image from Unsplash, chart from Tradingview

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers