Another slight decline sees Bitcoin at a crossroads as sellers erode a major exchange buy wall.
Bitcoin (BTC) broke through $38,000 support on June 18 but a reversal at solid support already has traders seeking fresh upside.
Bitcoin buy wall sees big test
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting local lows of $37,200 on Bitstamp before rebounding.
As Cointelegraph reported, Thursday saw a significant wall of support appear on major exchange Binance, around half of which still remains with $36,500 as a “line in the sand.”
“BTC is in the process of retesting the wedge it broke out from a few days ago,” popular trader Rekt Capital explained in his latest update.
While there remains the chance of a deeper dip, continued ranging at levels closer to $40,000 is giving commentators cause for optimism. Sources including Crypto Cobra are now eyeing a more significant crypto market rebound in the coming weeks or even days.
This week’s Federal Reserve meeting did little to buoy the mood, even as officials forecast higher inflation and held off on tapering unprecedented coronavirus-related interventions in the markets.
Bitcoin barely reacted, fellow trader Scott Melker noted, while gold sold off to dip to six-week lows. Only the U.S. dollar benefitted, despite the outlook ostensibly not in its favor.
“I love that the dollar is going up as the FED commits to more money printing and QE for the rest of the year, at least,” Melker added.
“We live in the upside down.”
NVT hints at “oversold” Bitcoin
Meanwhile, the latest incarnation of a classic indicator places Bitcoin firmly in “oversold” territory at current prices.
According to Willy Woo, creator of on-chain analytics resource Woobull, the network value to transaction (NVT) signal is now at a low which has historically been a bounce point.
NVT signal is based on the NVT ratio, a method for valuing Bitcoin using network valuation and value transacted, with a moving average used for the result. Woo describes NVT signal as a “more responsive” version suitable for use by traders.
“I’ve updated NVT Signal to correct for upward drift in the metric (due to volumes moving off the blockchain and only L2),” he told Twitter followers on Thursday.
“And yes, BTC is OVERSOLD at historic levels.”