Bitcoin Price News: Powerful Buy Signal is Still In Play as BTC Bounces Off $60K

Bitcoin (BTC) has kept rising after bouncing off the $60,000 mark in the last few days, and one historical buy signal sees it rising to a new all-time high as long as that support area holds.

Surprisingly, bulls set a line in the sand at $60K and caused a dramatic short squeeze as they pushed the price above this level on June 6.

Data from CoinGlass shows that nearly $700 million in short positions were blown up as BTC recovered above $61,000, as bears were expecting the continuation of the downtrend.

Rejection of 200-Day EMA Triggered BTC’s Latest Drop

Bitcoin’s strong retreat started after the token hit the 200-day exponential moving average (EMA).

We were expecting a spike in BTC’s selling pressure after hitting that key line, as this is a closely watched technical indicator by thousands of investors and speculators.

If the price of BTC rose above that mark, that would have caused a massive short squeeze that could have pushed the token to $100,000 rapidly.

Now that the token seems to have found a temporary floor, it would be interesting to see if bulls manage to push the price back to that line, as that would increase the odds of a breakout.

However, macroeconomic conditions have deteriorated, and market sentiment remains heavily depressed at the time of writing.

Inflation in the United States is rapidly rising, and market participants are concerned that this will prompt the Fed to increase interest rates before the year ends.

This would be an unfavorable turn of events for cryptocurrencies, and the crypto market is already pricing it.

We see how pessimistic investors are by looking at the Crypto Fear and Greed Index, as this sentiment gauge has dropped to Extreme Fear levels already after the latest pullback.

Moreover, Bitcoin-linked exchange-traded funds (ETFs) had another bad week, with net outflows of $322 million.

Bitcoin’s Weekly Buy Signal Still in Play as $60K Support Holds

We have been tracking for months a historical buy signal in the weekly chart that triggered after the Relative Strength Index (RSI) dropped below 30.

In the past, this signal has yielded some impressive results. The last three times it popped up, the price of BTC went on to rally to a new all-time high.

Meanwhile, only in one out of three occasions, the price went below its previous cycle low. This gives us a 100% win ratio for buy-and-hold investors and a 66% win ratio for swing traders. Not bad percentages for a signal that could yield a significant return in the mid-to-long term.

Right now, Bitcoin’s cycle low sits at $60,000. If we dip below that level, the odds that a bull market will begin in the next 1 to 3 months will be much lower. However, if we rally past the 200-day EMA, that would confirm that this bear market is over.

Moving to the daily chart, we got a sell signal right after BTC broke below its trend line support, but have not received another signal after that.

Since the daily RSI just stepped out of extreme oversold levels, we could still see this as a technical bounce and not a true recovery.

We are expecting a buy signal to confirm that this move is being accompanied by institutional-level volumes. Hence, stay tuned for our next updates on Bitcoin’s price action.