Bitcoin, the predominant cryptocurrency globally, has once again surged above the $60,000 threshold this week, reclaiming its position after a dip below $60,000 for the first time since May 3.
Despite this bounce back, experts analyzing the charts remain cautious, indicating a lack of buying signals which could potentially trigger another downturn at the current levels, posing potentially more significant repercussions. The trend has been relatively stable since March with trading pressure intensifying below the $66,000 mark, as highlighted by Oppenheimer analyst Ari Wald in reference to Bitcoin's 50-day moving average.
Since mid-March, Bitcoin has maintained a tight range fluctuating between $60,000 and $70,000 post its record high. Present market dynamics are marked by the absence of immediate catalysts, reduced interest in Bitcoin Exchange Traded Funds (ETFs), and miners offloading their Bitcoin reserves.
Wald warned that a breach of the $57,000 support level could lead to a notable drop towards $49,000. David Keller, the chief market strategist at StockCharts.com, echoed this view, projecting Bitcoin to target the $58,000 mark, with potential declines in the range of $50,000 to $52,000.
Buyers traditionally step in around the $60,000 zone, and Bitcoin commonly garners support at round numerical levels, suggesting a probable upswing in its value. Tom Fitzpatrick of RJ O'Brien highlighted critical support at $56,527 and identified a potential bearish double-top pattern, denoting a significant decline following the breach of a specific threshold.
While acknowledging the potential for a notable drop, Fitzpatrick underlined the importance of the $57,500 support level and the 200-day moving average. Wald emphasized the ongoing strength of the market at $57,500 and the 200-day moving average, indicating that the completion of the bearish pattern hinges on breaching a specific level. Until then, Wald remains aligned with the uptrend, banking on the resilience of the rising 200-day average, further supported by the positive risk sentiment reflected in the NASDAQ-100's upward trajectory.
*Disclaimer: This content is not intended as investment advice.
