On the daily chart below for BTCUSD, we can see that the price recently broke above a key resistance level that was set in June 2021. Like gold, bitcoin has been on an incredible rally since the collapse of the Silicon Valley Bank. Maybe that’s why Bitcoin is called “the digital gold”.
In fact, Bitcoin started to correlate with traditional assets since the covid pandemic because of wider adoption by retail and institutional traders. We can see it selling off in times of risk-off sentiment like other risk assets and rallying when there’s a positive sentiment in the market.
The moving averages are still crossed to the upside, so the bullish trend remains intact for now, but the big divergence with the MACD is a bad omen for the buyers if a negative catalyst triggers a selloff.
BTCUSD technical analysis
On the 4 hour chart below, we can see that the price broke out of the recent range formed right at the key resistance level at 28911. Recent US economic data has been missing expectations prompting the market to expect the Fed to end its tightening cycle at the May meeting.
What may bring bitcoin down is a recession as the risk sentiment would turn negative and the cryptocurrency would be sold off. Today we have the US Retail Sales report and if the data misses expectations, it’s likely that we will see more downside for bitcoin.
On the 1 hour chart below, we can see that there’s another divergence here. The level to watch is the trendline and the moving averages. If the price breaks below the trendline, we will likely see a pullback to the swing support at 29685.
And if that level breaks as well, then the sellers will extend the bearish move to the previous key resistance that now may turn support. The buyers are likely to lean on the trendline as they will have a defined risk and can fold fast if the price breaks below the trendline. The next support for them will be the 29685 level.
