Bitcoin There could be a quick rally above the $30,000 level in the coming days if it follows in the footsteps of a historical trading pattern that seems to be unfolding.
according to a Article Released by Bloomberg, after Bitcoin For a cryptocurrency that has jumped at least 3% in just one day only to give back the entirety of this gain the next day during a broadly bullish period, it typically moves about 7% within a three- to 10-day period. Reverses up to %.
for reference, Bitcoin It jumped 3% on Tuesday before falling 5% on Wednesday, meaning it is in the early stages of trading in line with this historical pattern.
If Bitcoin A 7% rally from Wednesday’s close of $28,800 would see it slide back just below $31,000.
According to Bloomberg, the above pattern has played out 17 times during bull market periods over the past five years.
Bullish market periods were defined as bitcoin’s 14-day relative strength index being above 50 (it was above 50 on Wednesday, but fell below 50 on Thursday).
Is bitcoin about to boom?
While the above analysis from Bloomberg suggests that there may be some reason for optimism regarding the coming bitcoin price surge, the chart analysis is sending more pessimistic signals, at least for the near-term price outlook.
Bitcoin was down just over 1.0% on Thursday and was trading near $28,500, having now broken below its 21-day moving average (at $29,054) and the late March low.
From a technical point of view, this means that the door is now open for a test of the downtrend connecting the late March/early April highs, which will be implemented in the $28,000 area.
If bitcoin breaks down from here, it will struggle to test the 50DMA and the support-resistance zone since mid-March at the $26,500 area.
A drop back to the key long-term support-turned-resistance in the $25,200-400 area is also likely on the cards.
Will the bulls buy the dip?
While significant uncertainty remains about how often US Federal Reserve will raise interest rates and when will it start Cutting To them, one thing seems certain – as US inflation and economic growth decline, the Fed’s tightening cycle appears to be coming to an end.
This implies that the macro is unlikely to return as a major headwind to the crypto markets in 2023, as it was in 2022.
That, combined with continued crypto adoption, progress toward legislation (the European Union just passed a landmark crypto bill) and a litany of On-chain, technical and market cycle indicators All shouting that last year’s lows marked the end of the crypto bear market means that bitcoin bull market likely to be alive and well in 2023.
So, expect bargain hunters and dippers to be eagerly waiting to jump in every time there is a significant drop in bitcoin’s value, as happened during mid-March.
A drop back to $25,000 could mark such an opportunity for long-term bulls, and would mark a decline of nearly 20% from the monthly high above $31,000.
Whether bitcoin can break back above $30,000 within the next ten days as Bloomberg’s price pattern analysis suggests remains to be seen.
But the long-term outlook remains strong.