BTC-“Watch-Out for Short-Coverings”

12-Hour Analysis:

Big Picture: Bitcoin is hovering close to the liquidity zone. The recent rapid sell-off prompted oscillating indicators to reach a highly oversold zone, resulting in short-term volatility. Going forward, the consolidation has created significant room in indications again, while late shorts are still at risk of being trapped.

On the Upside Bitcoin is struggling to break over the early resistance levels of 27,400 and 27,800. Short-term aggressive short-coverings will not occur unless prices exceed these levels. Above 27,800, the next resistance zone is in the range of 28,050 to 28,200 levels, followed by the prior congestion zone of 28,750 to 29,075 levels.

On the Downside due to oversold conditions, sellers were hesitant to initiate a hyper move to the downside, fearing that it may backfire severely. Now that fresh space has been created in the indicators, sellers may seek to reclaim control and go towards the liquidity zone. To partially offset the selling pressure, buyers must surpass 27,800 and maintain the price above it for a few hours in order to trigger a stronger round of short-coverings. Bitcoin is predicted to respond favorably when it reaches the 26,600 mark. The preceding leg, which crossed the 30k barrier, was prompted by the zone at 26,600. Hence a reaction can’t be ruled out at this level.