Bitcoin (BTC) has seen a bit of a price drop recently, but according to a new analysis, there may still be signs of a possible short-term upside.
CryptoQuant analyst, Yonsei Dent, shared his insights on the CryptoQuant QuickTake platform, focusing on the Coinbase Premium Index and its impact on Bitcoin price movements.
Key Short-Term Bitcoin Indicators
Dent’s analysis examines how the movement of the Coinbase Premium Index—a measure of the price difference between Bitcoin on Coinbase and other exchanges—can indicate potential price trends for Bitcoin.
Dent is highlighted using daily (24-hour) and weekly (168-hour) moving averages to assess short-term pressure. Specifically, when the daily moving average crosses the weekly moving average, it has historically been a positive signal for the price of Bitcoin.
Dent referred to past instances where this technical pattern, often referred to as a “golden cross,” has shown short-term increases in Bitcoin’s price.
In context, a golden cross in technical analysis occurs when a short-term (usually 50-day) moving average crosses above a longer-term (usually 200-day) moving average.
This pattern is considered bullish, indicating a possible increase in the price of the asset. It suggests that buying interest is increasing, and market sentiment is shifting to optimism.
The daily moving average briefly crossed the weekly average, leading Dent to suggest that this could be an important support level for Bitcoin, especially around the $66.4,000 mark.
High Lows and Positive Momentum can indicate an Uptrend
So far, BTC has continued to decline gradually after trying to regain the $70,000 price mark on Monday. This suggests that the asset is likely to encounter significant resistance in that price region. At the time of writing, BTC is down 2.2% over the past day with a current trading price of $65,832.
Despite this current price movement, Dent’s analysis shows that the stock has been making higher and higher highs since August, which is often considered a bullish pattern.
This ascending structure, where both the lows and highs are gradually increasing, may indicate that the market is building towards a stable price recovery.
Dent’s reference to the Coinbase Premium Index further reinforces this possibility, as increasing premiums on Coinbase often indicate strong buying pressure from US-based institutional investors. The analyst expects this upward momentum to continue in the short term if current patterns hold.
The featured image was created with DALL-E, a Chart from TradingView
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