Technical charts, especially the structure of candlesticks, often reveal the underlying psychology of the market, showcasing trader sentiment and behavior. Since Friday, at least two bitcoin (BTC) candles have signaled bullish tendencies at multi-month lows, offering a glimmer of hope for crypto enthusiasts.
The chart below illustrates that BTC’s price decline has been halted at the 200-day simple moving average support level since last Wednesday. The daily candles for Tuesday and Friday are particularly noteworthy, as both exhibit small bodies with elongated lower wicks, indicating that bears have struggled to maintain control below the 200-day SMA.
In other terms, on both occasions, sellers managed to push prices below the critical average but were unable to secure a lasting position there, likely due to buyers intervening to uphold the support level.
The appearance of such candles following a significant downtrend— as seen in BTC— hints at a possible bullish reversal. Traders typically interpret this as an indication of diminishing selling pressure which may lead into a renewed bullish phase.
Thus, BTC might rebound to Sunday’s high of approximately $95,000, beyond which traders could once again target the $100,000 milestone. Conversely, a downward breach of the 200-day SMA may result in more severe losses.
