Bitcoin’s price regained ground, recovering losses from the previous week’s close on August 28. As Chinese tax cuts spurred risk asset gains, Bitcoin’s price analysis indicated a focus on key support levels.
BTC/USD 1-hour chart. Source: TradingView
BTC/USD reached $26,226, its highest point since August 25, offsetting overnight weakness. The news of China reducing stock trading taxes by 50% bolstered U.S. futures, with the S&P 500 and Nasdaq Composite Index opening 0.6% and 0.7% higher, respectively.
“In that regard, a sweep of that area is the most likely outcome,” he wrote.
“Two strategies can be deployed: 1 – Sweep at $25,750 for an aggressive long entry towards the other side of the range (entry can only be taken after the sweep and when $25,750 is reclaimed). 2 – Sweep of $25,200 towards $24,700-25,000 (the 200-Week EMA on Binance) and bullish divergences on higher timeframes. That’s the golden trade and could be the start of a reversal. However, $25,750 should be reclaimed in the bounce, otherwise this trade could be invalid/stopped out.”
Looking ahead, trading expert Michaël van de Poppe noted the significance of the 200-week exponential moving average (EMA) at around $25,700 as a crucial support zone. He emphasized the importance of staying above this level and maintaining a pattern similar to the sideways period observed in 2015-2016.
$BTC still in a 3 day composite but has shown signs of absorption below. I wish it was liquid enough like the ES or NQ to simply justify saying "Hold 26.1 and those singles at 26275 get cleaned up"
Strong drive off the open for stocks.
It's Monday, so not looking to do anything… pic.twitter.com/6ObqBLIx5z
— HORSE (@TheFlowHorse) August 28, 2023
Another prominent trader, known as Titan of Crypto, identified $25,900 as a key zone to monitor closely for Bitcoin’s price action.
“If the 200-Week EMA sustains, conclusions are that we’re bottoming out here and we are potentially getting a massive entry point. If it’s lost, I’d be looking at a case of $19,500-21,500 as the next big entry point and final capitulation. On the lower timeframes and over the week, it’s still possible to sweep below the 200-Week EMA. As long as we don’t lose the level.”
Additionally, Bitcoin’s relative strength index (RSI) on lower timeframes remained notably low, referencing levels not witnessed in five years following a recent 10% price drop. RSI assesses whether an asset is overbought or oversold at a given price point.
BTC/USD annotated chart. Source: Michaël van de Poppe/X
As Bitcoin’s price responds to market dynamics and external influences, these support levels and RSI trends are being closely watched by traders and analysts alike.
#Bitcoin $25,900 is the level to watch 👀💥
Kijun 🔵 at $25.9k supported the #BTC price once more on the weekly timeframe. That's the level to watch.
If it holds, I won't be surprised to see a pullback to Tenkan 🔴 at around $28.4k. pic.twitter.com/VDcJQczDwc
— Titan of Crypto (@Washigorira) August 28, 2023