After a 10-day green streak, Bitcoin certainly surprised market participants recently and managed to climb above $40K. In just one night, BTC staged a last-minute rally and closed its first daily close above the upper level of its trading range at $42.2K.
Bitcoin Exceeds $40,000
On July 28, 2021, the third largest BTC whale transferred 3000 BTC to Coinbase, signaling short-term caution with price. This has been a local top indicator in many cases in the past. The cryptocurrency later saw a minor correction from $40.9k to $38.3k.
The bulls managed to make a solid recovery, marking the first daily close above the $20,000-$40,000 range. This is the first major step in the transition from the accumulation phase to the continuation of the bull market.
Throughout the impressive 10-day series, BTC momentum across multiple timeframes continued to rise, breaking above neutral zones. This is another big bullish signal in the medium term as it has been seen many times before in previous bull markets.
Notably, this has historically led to medium-term rallies as BTC has closed the day with green candles for 9 consecutive days, as shown in the chart below.
Previous resistances have now turned into short-term supports at $41.3K, $40.9K and 40K levels. Ideally, these levels should be tested retrospectively.
The latest price action is very optimistic for BTC but we have to wait for the weekly close for confirmation. Last week, BTC formed a solid weekly candle that signaled a potential reversal, especially after breaking above $30,000. The cryptocurrency needs to close at highs this week to confirm the pattern.
While the short-term price action is bullish, BTC remains below resistance at the 200-day MA and the 21-week MA, both of which are critical levels to recover. Techniques will rise a lot if BTC successfully closes the week and can stay above these levels.
Altogether, the current setup seems apt for the bulls, given bullish techniques, significantly improved momentum, bullish on-chain metrics in net outflow exceeding entries, backlog and recent drop in exchange reserves, BTC hash rate recovery, and record network user growth.
How much is Bitcoin (BTC) now?