The recent regulatory attacks and the more hawkish repricing for the Fed interest rates path weighed a lot on the Bitcoin price, but the cryptocurrency showed a surprising resilience and rallied back strongly as soon as the hawkish expectations waned, and the dust settled on the regulatory front. All else being equal, the recent strong bounce from a key support level may also suggest that we are about to see another extension to the upside, with a break of the 31K high being likely.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that the big divergence with the MACD eventually led to a sizeable pullback into the 25231 support where we had also the 50% Fibonacci retracement level. Since then, the price has rallied strongly into the trendline and yesterday we got a breakout that led to a fast move upwards as more momentum buyers jumped onboard. Now we can expect a pullback from the 28500 swing high level, which from a risk management perspective would be better for the buyers.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we are starting to get some long candlestick wicks as the sellers fight back and the buyers take some profits off the table. A good support level where the buyers can lean onto is the upward trendline. In fact, we can find confluence with the 50% or 61.8% Fibonacci retracement level, the red 21 moving average, a previous swing point and possibly even the broken downward trendline that may act as support now.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the quick rally since the break of the downward trendline into the 29000 level. Here is where we should start to see the pullback and we can see even better how strong the support at the trendline is with so many confluences in one spot. Aggressive sellers may want to pile in as soon as the price breaks below the 28500 level to target the trendline. More conservative sellers should wait for the price to break below the upward trendline to target the 25200 support.
Today, we have the Fed Chair Powell’s Testimony to Congress and if he delivers very hawkish comments, we can expect some selling in Bitcoin. Tomorrow we will see the US Jobless Claims and on Friday we conclude with the US PMIs. If the data misses expectations, we can expect more upside for Bitcoin, while if it beats, it would put some pressure on the cryptocurrency.