As Bitcoin price reverses on anticipation that BlackRock might soon apply to list a spot Ethereum exchange-traded fund (ETF), traders should watch for the $50,000 level. This level represents a psychologically significant level that could indicate strength or weakness in the cryptocurrency.
If Bitcoin can take out the $50,000 level, it would be a major bullish breakout and suggest further gains are possible. Alternatively, a failure to hit the mark could signal a breakdown that may lead to more losses.
In addition to watching the $50,000 level, traders should also keep an eye on the key technical indicators like the moving averages, the RSI, and the MACD. If the moving averages can remain in alignment, then it may indicate strength if the price breaks above the $50,000 level. A divergence between the moving averages could indicate potential weakness in the market.
The RSI also provides guidance on whether the market is overbought or oversold. If the RSI remains above 70, it could signal the market is overbought and a potential retracement is on the horizon. A fall below 30, on the other hand, could indicate that the market is oversold and a potential bounce is in order.
Finally, the MACD is a technical indicator that indicates the general direction of the trend. If the MACD is positive, it could suggest that the market is in a bullish trend. Conversely, if the MACD is negative, it may indicate a bearish trend in the near term.
Traders should keep an eye on the $50,000 level, the key technical indicators, and any other possible news catalysts that may affect the price of Bitcoin. If the market can break above the $50,000 level, then it could be an indication of further bullish sentiment for the digital asset. If not, then the price could be in for a reversal.