Bitcoin‘s surprising rise to $28,000 has convinced analysts that the selling pressure is almost over and that a recovery in the bull market is in its early stages. This rally, albeit short-lived, reduced the likelihood of BTC price falling below the $25,000 support/resistance level once again, thereby changing its technical direction.
Grayscale Lawsuit and Bitcoin
Investors quickly reacted to the significant victory of Grayscale Investments against the Securities and Exchange Commission (SEC), resulting in an increase in the trading volume of the leading cryptocurrency. The court’s decision allows Grayscale to convert its Bitcoin Trust (GBTC) product into a spot Bitcoin exchange-traded fund (ETF) after obtaining approval from the SEC.
Many analysts, opinion leaders, and experts in the crypto sector believe that the approval of a spot BTC ETF and the upcoming halving will fuel the expected next bull run in 2024/2025. However, the SEC continues to reject proposals, citing reasons such as volatility and potential market manipulation, in addition to other factors, to avoid giving the green light.
Will BTC Price Rise?
A research article by JPMorgan Chase & Co. published by Bloomberg suggests that the long-lasting crypto winter is nearly over. According to the researchers, the liquidation of long positions, especially in Bitcoin, “largely subsided.”
Based on indicators such as open interest in CME Bitcoin futures contracts, which indicate a decrease in the strength of the downtrend, analyst Nikolaos Panigirtzoglou stated that the downward trend is losing momentum.
As a result, we see a limited decline in the crypto markets in the near term. BTC price, which fell by 0.8% towards the end of Asian trading hours on Thursday, is trading at $27,206. The 200-day Exponential Moving Average (EMA) (purple) is providing immediate support at $27,179.
This position reflects the possibility of the downtrend continuing above $30,000, so Bitcoin needs to stay above $27,000. This support also reduces the likelihood of another sell-off below $25,000.
A buy signal from the Moving Average Convergence Divergence (MACD) indicator confirms the bullish outlook. When the blue MACD line crosses above the red signal line, the least resistance path points towards $30,000. As long as this momentum indicator continues to sustain the upward trend towards the zero line and positive territory, investors can confidently hold their long positions.
The Money Flow Index (MFI) is rising towards the overbought zone, further strengthening the upward trend. This indicates that money is flowing into BTC markets more than it is flowing out. In other words, investors are more interested in investing in Bitcoin rather than selling it in favor of other digital or traditional assets. Breaking above $28,000 and the upper boundary of the descending channel could signal the start of a rally above $30,000.
