Bitcoin price is currently in recovery mode after briefly plummeting below $30,000. According to PrimeXBT market analyst Kim Chua, the recovery has legs and could take Bitcoin to $42,000.
To little surprise, comments from eccentric Tesla CEO Elon Musk caused the price of Bitcoin and other top cryptocurrencies to surge, and forced short sellers to cover their positions. The powerful move also quickly prompted FOMO from new market participants that were waiting on the sidelines for the range to eventually break.
From Below $30,000 To $40,000 In A Week
Bears have failed to push Bitcoin below $29,000, which resulted in a higher low above the last local low around $28,600. The bounce formed a bull flag pattern between $29,000 and $33,000, which resolved to the upside and pushed Bitcoin out of its few-month-long downtrend.
Bulls Show Strength Relative To Massive Move
The Relative Strength Index is confirming the move with an equal movement higher in tandem with the breakout, and the strong showing by bulls has pushed the price per BTC through resistance at $36,500. A large magnitude of short positions were squeezed, which sent the cryptocurrency nearly to $40,000 in minutes on Sunday night. But bulls might not be done yet, according to Chua.
Support Holding Could Send Bitcoin To $42,000
The market has retraced slightly after such a powerful movement, but support is holding significantly above the key $36,500 level. Chua says that if this display of “strong buying conviction” continues, more upside is ahead. If Bitcoin can continue to hold, FOMO and momentum could carry the leading cryptocurrency by market cap all the way to $42,000 where it will face the next level of high timeframe resistance.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.