Bitcoin has been on a downtrend recently and although it has had multiple recoveries, it is still a long way off from its all-time high. There are a number of indicators that point towards bullish and bearish trends, but mainly seem to stand in the middle. One indicator seems to point to the further upside coming, adding as much as $6K to the price of the digital asset.
What The Daily OBV Chart Says
A crypto education and market analysis account on Twitter recently posted a chart mapping out what the daily OBV chart might be saying for bitcoin. Mapping out previous movements on this chart, Income Sharks shows that the digital asset has once again touched an important point that could cause it to grow further. The last time the cryptocurrency had made this move in the chart was in July 2021.
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We’ll recall that July/August was an important time period for the digital asset. This was the first time that bitcoin had hit the $60,000 price point. It had grown from $30,000 to a new all-time high in a matter of weeks, all of which started with a double bottom made by bitcoin on the OBV chart. Now, bitcoin has once more hit the same pattern and if history is any indicator, it might be getting ready for another rally.
OBV chart shows bitcoin has hit bottom | Source: Income Sharks
As the digital asset has formed another double bottom on the chart, making a very sharp bullish double V spike, it could signal that a break above $50,000 is imminent. Not only is this an important signal, but it is also almost more bullish this time around. And what’s more, this could very well signal the bottom of the downtrend, suggesting that the digital asset may begin another bull rally.
Bitcoin Starting Another Uptrend
Bitcoin has once again entered another recovery trend that has put it above $44K. Although it had claimed this point earlier in the month, bears had successfully pulled it down, pushing it far away from the $46K price mark that would solidify its entry into another bull market.
The digital asset is now trading above its 50-day simple moving average. This shows that bears have lost hold of the market, but doesn’t completely eliminate the possibility of a slip downwards. Sentiment has skewed into majority buy but not by much.
BTC recovers above $44K | Source: BTCUSD on TradingView.com
From here, the next major resistance point is at 44,900, where bulls will most likely meet strong resistance from the bears. Bitcoin still needs to settle above $46K to eliminate risks of more downside. A slip from its current price will set it on a path down to $42K, where the 1st major support level rests at $42,665. Below that would see bulls fight for control at $41,339.
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Bitcoin is currently trading at $44,080 at the time of this writing, after hitting $44,800 in the early hours of Wednesday. Outlook for the rest of the trading day remains bullish with BTC expected to close out the day above $44K once more.
Featured image from Finextra, chart from TradingView.com