Bitcoin tests key levels as crypto markets rebound. On Tuesday, the total market cap rose nearly 2% to $2.8 trillion.
Meanwhile, traders are watching several signals. Therefore, here is what to monitor.
Market sentiment improves slightly
The Crypto Fear & Greed Index now reads 51. That is a Neutral reading. It rose three points from yesterday’s 49.
Macro backdrop remains tense
Brent crude oil trades near $110 a barrel. Attacks on tankers in the Strait of Hormuz are driving prices. Consequently, expensive oil feeds inflation.
Higher inflation raises the odds that the Fed keeps rates high. It also increases the chance of another hike. Therefore, Treasury yields stay above 5%. Higher yields pull money out of risk assets like crypto. The Fed next meets on October 27 and 28.
Bitcoin tests key levels on the daily chart
Bitcoin trades just below $83,000. It holds above both key moving averages. Specifically, it bounced from the $80,000 area.
The bounce occurred at a confluence. That confluence includes the 50-day EMA and natural support. The EMA50 sits at $80,702.8. The 200-day EMA sits at $76,123.1.
Bitcoin’s price is above both. Also, the EMA50 is above the EMA200. Therefore, the trend structure remains bullish.
The RSI reads 53.34. Readings above 70 suggest overbought conditions. Readings below 30 suggest oversold. Therefore, 53 shows neutral momentum with a slight positive tilt.
Key resistance and support levels
The nearest resistance is $87,371. Bitcoin must close above it on the daily chart. That would confirm the bounce is turning into a new leg higher.
Support is layered below. The first floor is $80,433. That lines up closely with the EMA50.
The next support is $76,140. That sits almost exactly on the EMA200. Below that, the chart marks $72,671 and $69,202. Lower levels include $64,263 and $57,972.
Three scenarios to watch
In the bullish scenario, Bitcoin pushes through $87,371 with rising momentum. The RSI would move toward the 60s. Price would then have room to run.
In the base scenario, Bitcoin ranges between $80,433 and $87,371. The RSI stays near 50. The EMA50 acts as a floor while resistance caps rallies.
In the bearish scenario, a daily close below $80,433 breaks the EMA50. That would open a drop toward $76,140. A close below that would shift focus to $72,671.
Key levels to watch
Resistance sits at $87,371. Support sits at $80,433 and $76,140. The next floor is $72,671 if both give way.
The views and opinions expressed by the author are for informational purposes only. They do not constitute financial, investment, or other advice.