Bitcoin is currently on a recovery path, which tracks to analysts’ prediction that the price decline over the last two days has been more of a bear trap. Crypto analyst Orson Fawley elaborates more on this in his analysis and shows that the BTC price remains inherently bullish given its recent movements.
Bitcoin Recovery Is Strong
Fawley took to the TradingView website to share his analysis on Bitcoin, covering its surge from last weekend through to the price decline on Monday. The crypto analyst pointed out that with the weekend surge that began on Friday, Bitcoin was able to form a wide-ranging bullish D1 candlestick close to its high.
Now, the thing about wide-ranging D1 candlesticks is that they are used to measure buying pressure. Given that this candlestick closed near the Bitcoin high on Friday, Fawley explains that this means that the price was being pushed up due to strong and sustained BTC buying pressure.
Furthermore, the analyst explains that the candlestick had also broken Bitcoin’s previous “Inside Bar pattern”. This pretty much tells the same story as the wide-ranging D1 candlestick closing to close its high, meaning that buying pressure has been sustained for the digital asset.
As a result of this price surge, Bitcoin had been able to break above $60,000, which the crypt analyst identifies to be a major psychological level. Breaking this $60,000 level has been positive for the coin, and this fuels Fawley’s sentiment that the price decline was a false break. In other words, the decline was a bear trap.
Source: Tradingview.com
For those unfamiliar, bear traps are crashes in price after a period of price recovery that makes investors believe that the price has peaked. This draws in more bears who continue to short the price, thinking it will keep falling, but eventually, the price resumes its upward trajectory. Since the BTC price decline has been identified as a bear trap, it means that the cryptocurrency’s price is expected to continue its climb toward its all-time highs.
BTC Buying Pressure Continues
Fawley also analyzed the Bitcoin price going forward, using the 4-hour chart as the point of focus. In this chart, the crypto analyst confirmed that BTC had formed a V-shaped pattern as a result of the strong buying pressure from the bottom of the dip.
He also points out that the coin had broken above its downward trend line resistance. This comes as the Bitcoin price is forming an accumulation zone around its recent high, which has been around $64,000. According to the analyst, if Bitcoin “ can break above this price high and the PPZ area, Bitcoin H4 will revert to the uptrend structure on the H4 timeframe.”
Presently, the BTC price is still holding above $64,000 after a sharp surge in the early hours of Tuesday. Its daily volume has also risen 45%, lending credence to Fawley’s analysis that buying pressure remains strong. “The false break creating a bear trap on Friday and sustaining through Saturday and Sunday shows Bitcoin D1 is strengthening,” Fawley states.
BTC price drops below $64,000 | Source: BTCUSD on Tradingview.com
Featured image from Forkast News, chart from Tradingview.com