Bitcoin is facing resistance at its yearly high of the $35,000 mark amidst a few days of eventful price action. Right now, all things seem poised for a retracement, considering past price action of the cryptocurrency after sudden price surges.
However, according to some crypto analysts, Bitcoin is currently trading at a high premium. This means its price is inflated right now due to all the excitement and media attention. Data from crypto behavior analytics Santiment has shown euphoria regarding 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 the best time to buy is at a discount price.
Analyst Recommend Waiting For The Next Dip To Buy
Bitcoin’s current surge can likely be attributed to FOMO from investors regarding the approval of spot Bitcoin ETFs. This FOMO was reinforced 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 an ongoing consolidation and a pause in the price surge. However, the listing has since returned, with slight changes.
Although analyst Daan Foppen credited this recent Bitcoin price spike as a good sign for bulls, he warned that the price is “currently trading in a bearish monthly fair value gap (FVG).” A good step right now is to keep an eye on the monthly close for a potential change in a scenario that will show the next direction after the current consolidation.
Foppen believes a monthly close that is higher than $31,800 will solidify the beginning of a longer-term bullish momentum, while a close below the $31,800 mark 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 printed another higher high. If we close below 31.8K, my thesis will change from bull to bear, but for now, we have nothing to worry about,” Foppen said.
According to Foppen, a better strategy before buying it is to wait for discount prices at previous resistance levels. The analyst made this analysis by sharing various BTC price charts on different timeframes.
Source: MN Trading
While examining the 1-hour timeframe, he noted 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?
At the moment, Bitcoin is trading at a premium, meaning it’s on the higher end of its typical range. However, considering the volatility and still-nascent phase of the crypto industry, it can be somewhat difficult to use Bitcoin’s past performance to predict future outcomes.
Bitcoin is up by 22.30% in a 7-day timeframe, but the 24-hour trading volume dropped by 27.48%, indicating that the price increase may be beginning to level off. However, there’s certainly a very strong price spike in the near future.
Adam Back, the CEO of Blockstream, is of the opinion that the digital currency now possesses sufficient fundamentals to propel it past the price point of $100,000.
BTC corrects downward | Source: BTCUSD on Tradingview.com
Featured image from The Daily Hodl, chart from Tradingview.com