The rollercoaster ride for Bitcoin continues
Bitcoin has certainly reawakened after its range bound price action throughout most of June and July. The move higher was most likely sparked by a mild short squeeze which then turned into an aggressive short squeeze (More than $950 million of crypto shorts were liquidated) after the Amazon rumours from an insider that they would accept Bitcoin in 2022 and were investigating issuing their own coin. Some key technical levels were also breached which probably triggered a couple stops amongst the systematic traders. Then price quickly moved lower after Amazon denied the rumours, but not all gains were erased as Amazon dangled the carrot in front of Crypto enthusiasts stating they will continue exploring cryptocurrencies. Client positioning at Pepperstone skews 70% long 30% short for Bitcoin.
Looking at the chart, we see Bitcoin bounced aggressively off range support around the $30/31k level, slicing right through its 21-day EMA and 50-day SMA as well as key horizontal resistance levels such as $35.7k and $38.2k. Price pushed right up to range resistance around $40.5k, before paring back some gains. The RSI is nearing overbought and emphatically breached the 48 level which was acting to cap previous price rallies. The 21-day EMA looks to be wanting to cross above the 50-day SMA. In terms of targets to pop on your radar, the first upside target would be the range resistance around $40.5/41k and beyond there the 200-day SMA around $45k. On the downside, the 50-day SMA and 21-day EMA could be a point of interest with moves lower bringing range support $30.5/31k back into view.
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