Bitcoin is facing resistance at its annual high of $35,000 in a few days eventful price action. Right now, all things seem set for a retracement given the cryptocurrency’s previous price action after sudden price increases.
However, according to some crypto analysts, Bitcoin is currently trading at a high premium. This means that the price is currently high due to all the excitement and media attention. Data from crypto behavioral analytics Santiment has shown euphoria about Bitcoin among investors on social media posts. This euphoria has occasionally preceded a decline in the price of BTC.
MN Trading analyst Daan Foppen warns that the cryptocurrency is currently trading at a significant premium, noting that the best time to buy is at a discounted price.
Analysts recommend waiting for the next dip to buy
Bitcoin’s current surge can likely be attributed to investor FOMO regarding the adoption of spot Bitcoin ETFs. This FOMO was amplified by the emergence of BlackRock’s iShares Bitcoin Trust on the DTCC website.
The Bitcoin Trust was removed from the DTCC website without explanation, leading to continued consolidation and a lull in price appreciation. however, the mention has since returnedwith minor changes.
Although analyst Daan Foppen mentioned this recent Bitcoin price spike as one good sign for bullshe warned that the price is “currently trading in a bearish monthly fair value gap (FVG).” A good step at this point is to keep an eye on the month-end close for a possible change in a scenario that will indicate the next direction after the current consolidation.
Foppen believes a monthly close above $31,800 will cement the beginnings of longer-term bullish momentum, while a close below $31,800 will prove the bears are still in control.
“We had a convincing break above the most recent high of 31.8K, which is crucial for further upside momentum. If we close the candle like this, we can say that we have pushed a higher high again. If we close below 31.8K, my position will change from bull to bear, but for now we have nothing to worry about,” said Foppen.
According to Foppen, waiting for discount prices at previous resistance levels is a better strategy before buying. The analyst made this analysis by sharing several BTC price charts on different time frames.
Source: MN Trading
While examining the 1-hour time frame, he noted that the best discount price for cautious traders could be at the “untested order block around $31,000, which is in line with the previous range high.”
Source: MN Trading
What’s next for Bitcoin?
Right now, Bitcoin is trading at a premium, meaning it is at the top end of its typical range. However, given the volatility and still nascent stage of the crypto industry, it can be somewhat difficult to use Bitcoin’s past performance to predict future results.
Bitcoin is up 22.30% in a seven-day span, but 24-hour trading volume fell 27.48%, indicating that the price increase may be starting to level off. However, there is definitely a very strong price spike in the near future.
Adam Back, the CEO of Blockstream, believes that the digital currency now has sufficient basic knowledge to push it past the $100,000 price point.
BTC corrects downward | Source: BTCUSD on Tradingview.com
Featured image from The Daily Hodl, chart from Tradingview.com