Bitcoin (BTC) has seen a slight price decline recently, but according to a new analysis, there could still be signs of a potential short-term uptrend.
A CryptoQuant analyst, Yonsei Dent, shared his insights on the CryptoQuant QuickTake platform, focusing on the Coinbase Premium Index and its impact on Bitcoin’s price movement.
Key Indicators For Bitcoin Short-Term Momentum
Dent’s analysis takes a closer look at how the movement of the Coinbase Premium Index—a measure of the price difference between Bitcoin on Coinbase and other exchanges—could indicate potential price trends for Bitcoin.
Dent highlighted using the daily (24-hour) and weekly (168-hour) moving averages to assess short-term momentum. Specifically, when the daily moving average breaks through the weekly moving average, it has historically been a positive signal for Bitcoin’s price.
Dent referred to past instances where this technical pattern, often called a “golden cross,” indicated a short-term increase in Bitcoin’s value.
For context, a golden cross in technical analysis occurs when a short-term moving average (typically the 50-day) crosses above a long-term moving average (often the 200-day).
This pattern is considered bullish, indicating potential upward momentum in an asset’s price. It suggests that buying interest is increasing, and the market sentiment is shifting toward optimism.
The daily moving average has temporarily broken through the weekly moving average, leading Dent to suggest that this could be a key support level for Bitcoin, particularly around the $66.4,000 mark.
Higher Lows And Positive Momentum Could Indicate Uptrend
So far, BTC has continued to gradually decline after attempting to reclaim the $70,000 price mark on Monday. This suggests the asset might have met a major resistance around that price region. At the time of writing, BTC has dropped by 2.2% in the past day with a current trading price of $65,832.
Despite this current price movement, Dent’s analysis points out that the asset has been forming higher highs and higher lows since August, which is generally considered a bullish pattern.
This upward structure, where both the lows and highs gradually increase, could signal that the market is building toward a more sustainable price recovery.
Dent’s reference to the Coinbase Premium Index further strengthens this possibility, as increased premiums on Coinbase often indicate stronger buying pressure from institutional investors based in the US. The analyst expects this upward momentum to continue in the short term if the current patterns hold.
Featured image created with DALL-E, Chart from TradingView
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Samuel Edyme
https://www.newsbtc.com/bitcoin-news/bitcoin-current-decline-could-be-temporary-key-signs-of-a-rally-revealed/
2024-10-24 08:30:57
