Over the past five days Bitcoin (BTC) price rebounded nicely from its recent low at $52,500 and technical charts suggest the momentum could extend to the $62,000 to $65,000 zone.
Similar to last week’s price action, on the higher timeframe, Bitcoin is still making weekly lower highs as each sell-off concretizes previous support levels into resistance. Futures liquidation-driven sell-offs continue to produce lower lows with relatively deep wicks, and while it’s unpleasant to hear, Bitcoin price remains in a structurally ordered downtrend.
On a week-to-week basis, the desired path for a market structure reversal would be to see weekly closes above the previous weekly candle and eventually weekly candle closes above $65,000. Doing so would at least give bulls a chance to overcome the range high and descending trendline at $66,000 and perhaps overcome what has been a six-month downtrend.
BTC/USDT weekly chart. Source: TradingView
Zooming in on the more day-to-day price action, market-savvy momentum traders have probably been having a field day since making a bet on buying dips to the descending trendline and selling at the overhead 61.8% Fibonacci retracement level proved to be a fruitful strategy.
BTC/USDT daily chart. Source: TradingView
Assuming the pattern of lower weekly highs remains locked in, the Bollinger Bands, 200-day moving average and BTC’s Fib levels suggest the current rally will hit a wall in the $62,000 to $63,000 range.
Beyond the daily and week-to-week price action, sustainable spot demand from buyers remains an issue.
BTC/USDT 4-hour chart. Source: Velo
Similar to previous weeks, the bulk of Bitcoin’s upside price action is driven by forced buying as a result of liquidations and the momentum dries up as there’s insufficient appetite to battle asks at resistance levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
