- Bitcoin generated an’oversold buy’ signal that could lead to short-term upside, according to Fairlead’s Katie Stockton.
- Stockton sees bitcoin trending towards resistance near $ 48,100, which represents 13% upside from current levels.
- “The rally off support has kept the weekly MACD on a’buy’ signal in a reflection of improved momentum,” Stockton told Insider.
Bitcoin could see more upside in the short-term after the cryptocurrency generated an “oversold buy” signal earlier this week, Fairlead Strategies’ Katie Stockton told Insider.
The key test was bitcoin’s ability to decisively hold $ 40,000 as a support level, according to Stockton, who now expects bitcoin to trend towards its 200-day moving average in the short-term.
“Bitcoin held important cloud-based support near $ 40.0K and has generated an oversold’buy’ signal from the daily stochastics after a three-day rally, supporting a short-term bullish bias,” she told Insider.
Bitcoin’s 200-day moving average is a likely area for bitcoin to hit resistance, which currently stands around $ 48,100, according to Stockton. A surge to that price would represent potential upside of 13% from current levels.
“The daily MACD is pinched as well, reflecting improved short-term momentum that supports a move higher toward next resistance near $ 48.1K,” she said.
The MACD indicator, short for moving average convergence / diversity, tracks the movement of moving averages and is separate from moving average crossover strategies that include the widely followed death cross and golden cross.
“From an intermediate-term perspective, the rally off support has kept the weekly MACD on a’buy’ signal in a reflection of improved momentum. If the weekly stochastics turn up, we would move back to a bullish intermediate-term bias,” Stockton explained.
Bitcoin has been stuck in a volatile trading range since it topped out near $ 69,000 in November. The cryptocurrency has fallen to as low as $ 33,000 before paring its losses. Bitcoin traded up about 3% to $ 42,761 on Thursday.