Home » Bitcoin Reclaims $26.2K Amid Chinese Tax Cut Boost: Support Levels in Focus

Bitcoin Reclaims $26.2K Amid Chinese Tax Cut Boost: Support Levels in Focus

Analysts Highlight Crucial Support Points, RSI Levels Remain Low

by Isaac lane
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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.

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.

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