Bitcoin (BTC) price has finally steadied above the 21 day EMA after almost a week of uncertainty. BTC/USD has started the day in green and the price is likely to keep on rallying from current levels. We have yet to see whether Bitcoin (BTC) can pump in the same manner that it has in the recent past but it is becoming clear that the price will crawl towards the $5,800 level if it fails to run. Most retail bears are already too confident expecting the price of Bitcoin (BTC) to fall sharply from current levels. However, the bulls are unlikely to give up until the price faces a strong rejection at the $5,800-$6,000 resistance zone. Meanwhile, the whales could surprise both the bulls and the bears with a short squeeze that would liquidate most bearish positions and also trap in some greedy bulls.
There is nothing wrong with buying Bitcoin (BTC) at current prices. In fact, if one believes in its long term potential, the price is still down around 73% from its all-time high which is a very good deal. However, some people in this market try to pretend that buying at $6,000 or $3,000 is going to be the same thing in the grand scheme of things. Besides, it makes sense for value investors to start accumulating at current levels but traders wait for confirmation before they buy or sell. Until we see a successful break and close above $6,000, BTC/USD remains bearish. If the price continues to linger around in the $6,000s it will be in neutral territory. If it ends up breaking to the upside and forming higher highs and higher lows, that would be a bullish reversal. On the other hand, if Bitcoin (BTC) tests the $5,800-$6,000 zone and faces a strong rejection, the price would enter another downtrend.
Bitcoin (BTC) bears are started to give up as the daily chart for BTCUSDShorts shows the number of margined shorts against BTC/USD is set to decline in the days ahead. RSI and Stochastic indicator on the daily chart also point to the same conclusion. BTCUSDShorts is currently above the 200 day moving average and is expected to see a sharp pullback. The long term trend line support that BTCUSDShorts has managed to stay above has yet to be broken.
The Fear and Greed Index is now at 42 which means there is fear in the market again. If BTC/USD pumps in the days ahead, the sentiment could turn back straight to green from fear. The most likely scenario is that the price will crawl towards the $5,800 mark and the bears will keep on losing interest. We could see some stop hunting close to the $6,000 mark as that is where most of the retail bears have their stop losses at. The long term outlook of Bitcoin (BTC) remains unchanged and the price will have to fall to $1,800 or lower levels in the weeks and months ahead to find its true bottom.