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Bitcoin Bulls Look to Retake Charge: Watch Out for a Breakout Above This Level

Published 19/04/2024, 12:00
BTC/USD
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  • Bitcoin bulls were discouraged by rising geopolitical tensions last week.
  • It has consolidated between $60,000 and $65,000, with $60,000 as a crucial support backed by the 3-month EMA around $60,100.
  • Breakout above a key resistance zone could signal that the bulls are back in the driver's seat.
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  • Bitcoin bulls faced a setback last week as their attempt to break above a short-term symmetrical triangle was thwarted by rising tensions between Israel and Iran. This dampened risk appetite across crypto markets and invalidated Bitcoin's potential breakout.

    The week began with Bitcoin attempting to revisit the $71,000 resistance zone after a brief pullback. However, selling pressure emerged around this area, pushing the price back down. The escalation of tensions later in the week further pressured the cryptocurrency, leading it to test the key $60,000 support level.

    On the daily chart, Bitcoin's recent price action reveals a consolidation between $60,000 and $65,000. This zone has been crucial for Bitcoin since March, with the lower level ($60,000) acting as a reliable support.

    Additionally, the 3-month EMA (Exponential Moving Average) sits around $60,100, providing further technical support. Maintaining this level is critical for Bitcoin's recovery. If the price holds above $60,000, it could be a bullish signal for investors looking to capitalize on a potential rebound.

    BTC/USD Price Chart

    Bitcoin's recovery remains uncertain as the price struggles to break free of its consolidation phase. The key hurdle lies between $64,580 and $66,170, formed by the short-term exponential moving averages (EMAs) acting as a resistance line.

    Surpassing this resistance could trigger a surge towards $73,000, aligning with the upper channel boundary established during consolidation. The daily Stochastic RSI also hints at a potential short-term bounce, generating a buy signal if it climbs above 20 after breaching the resistance line.

    Despite the short-term optimism, the weekly Stochastic RSI's downward trend suggests broader technical pressure. This could lead to a retest of the $60,000 support level before a rebound. Therefore, traders should closely monitor the $66,000 resistance zone over the coming days.

    Staying Above $60K is Key for Bulls

    Overall, Bitcoin remains trapped within the consolidation phase that began in March. If a fresh wave of selling erupts due to global events, the critical support at $60,000 will be in focus.

    The absence of daily closes below $60,000 during consolidation suggests a potential downward breakout. Depending on selling intensity, Bitcoin could plunge to $52,300 (Fib 0.618 retracement level).

    However, intermediate support around $56,000 might offer a reprieve based on the 2024 upward trend.

    This weekend marks the highly anticipated Bitcoin halving event, which will reduce the supply of new coins. While the short-term impact may be muted, long-term investors remain optimistic due to its historical correlation with price surges.

    However, predicting the exact price movement during halving periods, occurring every four years, is challenging due to evolving economic conditions and market dynamics.

    Since last summer, Bitcoin has been heavily influenced by ETF inflows. Initially, spot Bitcoin ETF anticipation drove the price. Later, the launch of such ETFs accelerated institutional buying, propelling Bitcoin to pre-halving highs.

    With institutions now holding a significant amount of Bitcoin, any slowdown in ETF sales could delay the halving's positive impact.

    Considering how institutional investors base their decisions on global economic and political developments, Bitcoin might become even more intertwined with the broader economy in the future.

    The recent price volatility serves as a stark reminder of this growing dependence.

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