Technical Analysis of Bitcoin (BTC)

Bitcoin prices have recently plunged due to a confluence of adverse factors, primarily triggered by the commencement of creditor payouts by Mt. Gox, the now-defunct cryptocurrency exchange. This mass liquidation of BTC has rattled investors and sparked a selling spree, driving the price towards its lowest levels of the year.

Adding to the bearish sentiment are Bitcoin sales by the US government and potentially affiliated institutions in Germany. These additional sell-offs intensified downward pressure, particularly exacerbated as US markets were closed during a critical support breach.

With Bitcoin now hovering near annual lows, attention turns to the reopening of US markets today and how institutional investors will respond. The recent increase in demand for Bitcoin ETFs could sway the cryptocurrency’s direction.

Continued Mt. Gox payouts raise concerns of further price declines as investors anticipate additional selling pressure. This could be exacerbated if ETFs are liquidated amidst a bearish market sentiment.

While internal dynamics within the crypto market drive current pessimism, today’s release of the highly anticipated US Non-Farm Payrolls data carries significance. A weaker-than-expected report, indicating economic cooling, might bolster Bitcoin and broader market sentiment by potentially hinting at Fed interest rate cuts.

Factors contributing to Bitcoin’s downward pressure also include the Fed’s reduced rate cut forecasts and higher operational costs for miners post-halving. Historical patterns indicate seasonal selling activity in Bitcoin.

Despite the current downturn, a potential recovery remains plausible once selling stabilizes. This hinges on positive developments and confirmation through technical indicators signaling a turnaround.

Bitcoin daily price chart

Charts using TradingView

Bitcoin Daily Chart Analysis

Bitcoin saw significant upward momentum in the first quarter, as depicted on the daily chart. The cryptocurrency fluctuated, finding support around $60,000 and reaching a peak of $71,000 over the past three months, forming a double top pattern. A break below the support line this week could potentially lead to a decline equivalent to the distance between the support and peak levels.

Today, Bitcoin experienced a drop to $53,400, testing a critical Fib 0.618 support level relative to the uptrend of 2024. If this support zone fails to hold, BTC might retreat further to $48,300 (Fib 0.786) in the coming days, aligning with the parameters of the double top pattern. Continued daily closes below $53,500 could initiate further downward movements towards the Fib 0.786 level.

However, positive US employment data and slower Bitcoin transfers from Mt. Gox could bolster market sentiment. To initiate a recovery, Bitcoin would need to achieve a weekly close above $57,300. Additionally, monitoring the Stochastic RSI, which currently shows a sharp decline, for signs of stabilization and reversal could indicate a potential turnaround.

Failure to maintain the $53,500 support level might result in Bitcoin dropping below $50,000.

Bitcoin (BTC) is currently experiencing a consolidation phase after a recent rally. The price is holding above the key support level at $30,000, indicating a bullish bias in the short term. However, the immediate resistance lies at $35,000, which needs to be breached for further upside momentum. If BTC manages to break above $35,000, the next target could be around $40,000, with strong support seen at $28,000 in case of a retracement. The RSI (Relative Strength Index) is currently in neutral territory, suggesting that BTC could see further sideways movement before a clear directional move.

Disclaimer: This article is provided for informational purposes only. It does not constitute a solicitation, offer, advice, counsel, or recommendation to invest in any assets. Investing involves risks, and any decision to invest should be evaluated carefully from multiple perspectives. Investors should be aware that all investments carry inherent risks, and they bear full responsibility for their investment decisions and associated risks.