Sheldon McIntyre, CMT
Independent Analyst
- Bitcoin price still unable to reclaim the psychologically important $60,000.
- Miners have returned to accumulation mode.
- Ascending wedge pattern projects another marginal high before reversing.
Bitcoin price has failed to close above $60,000 on a daily basis since March 13 but has been supported by the 21-day simple moving average (SMA) over the last seven days. Overall, the technical picture has tilted bearish in the short-term while the on-chain metrics are mixed. The complex picture makes it prudent to wait for the unpredictable directional movement to resolve in either direction.
Bitcoin price boxed in by underlying fundamentals
On the bullish side of the ledger, BTC miners, albeit an increasingly smaller influence as sell-side entities compared to daily trade volume, are net accumulating bitcoin at levels last seen in December 2020.
On the flipside, short-term holders have accumulated around 440k more BTC than long-term holders have spent over the previous six months, indicating a burgeoning new demand hitting the market. The problem is, this type of wealth transfer occurred at the 2017 peak.
Yes, BTC has closed above the $1 trillion market capitalization for ten consecutive days, but it has not gotten any closer to resolving the heavy resistance at $60,000. As an observation, the bellwether token has registered four daily dojis just below the psychologically important level since March 20, reflecting the balance between supply and demand.
The long-term outlook for BTC remains positive, but it is important to entertain the potential that it is forming a complex top in the short term in the form of an ascending wedge pattern.
The wedge pattern could last a few more weeks, and BTC should print at least one more marginal high before strongly reverting to the downside. Support first appears at the intersection of the 50-day SMA with the wedge’s lower trendline at $54,000, followed by the March low at $50,305.
A deeper correction puts the 100-day SMA in play at $45,057 and then the February 28 low at $43,106.
BTC/USD daily chart
A bullish resolution of the pattern would release BTC to test the 4.618 Fibonacci extension of the 2017-2018 bear market at $80,541. Higher targets would need to be evaluated after the resolution.
Over the last few weeks, adoption momentum has surpassed anything in the past, but it has not sprung BTC higher, begging the question of whether the good news is priced in.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Why crypto may see a recovery right before or shortly after Bitcoin halving
Cryptocurrency market is bleeding, with Bitcoin price leading altcoins south in a broader market crash. The elevated risk levels have bulls sitting on their hands, but analysts from Santiment say this bleed may only be cauterized right before or shortly after the halving.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network (MANTA) price was not spared from the broader market crash instigated by a weakness in the Bitcoin (BTC) market. While analysts call a bottoming out in the BTC price, the Web3 modular ecosystem token could suffer further impact.
Bitcoin price uptrend to continue post-halving, Bernstein report says as traders remain in disarray
Bitcoin is dropping amid elevated risk levels in the market. It comes as traders count hours to the much-anticipated halving event. Amid the market lull, experts say we may not see a rally until after the halving.
OMNI post nearly 50% loss after airdrop and exchange listing
Omni network (OMNI) lost nearly 50% of its value on Wednesday after investors dumped the token following its listing on top crypto exchanges. A potential reason for the crash may be due to the wider crypto market slump.
Bitcoin: BTC’s rangebound movement leaves traders confused
Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established.