As recently as late May, it looked like bitcoin bulls could have bottomed out in the $25,800 area. However, the negative news about the Binance and Coinbase exchanges seem to have dashed these hopes on the buyer side in the short term. In view of the bad news, the price reaction of the key cryptocurrency is not entirely surprising. In line with Warren Buffett’s mantra, “Buy when the streets are soaked in blood”, the Bitcoin price initially resisted a sell-off after successfully retesting the old breakout level from mid-March. The make-or-break level held for a short time. While BTC price remains unchanged in a downtrend channel, the forming “Falling Wedge” chart pattern could throw a spanner in the works for the pessimists. In the last few days, Bitcoin has not only formed higher lows and used the chart mark of $26,300 as a trampoline north, but is also likely to knock again on the resist bulwark between $27,238 and $27,560 in the near future. A break above this resistance area is likely to mislead many bearish investors and prompt short-covering.
A dynamic eruption including a bouncy ball effect to the north could be the result. This scenario is supported by bullish divergences in the 4-hour and daily charts. Paradoxically, the Securities and Exchange Commission’s (SEC) designation of many altcoins as unregistered securities could play into bitcoin’s hands. Investors recently fled from these alternative cryptocurrencies. Partly back to stablecoins like US-Tether, partly back to the safe haven Bitcoin. Although the total amount of stablecoins on central exchanges has fallen to a multi-year low, the fact that the share of USDT on so-called whale wallets according to the analysis house Santiment is at an all-time high, evidence of plenty of dry powder that could be flushed back into the market from the sidelines at any time. Despite these indications, a bearish scenario cannot be ruled out entirely. If Bitcoin sustainably dives south through $25,000 in high volume in the coming weeks and thus also abandons the exponential moving average of the last 200 days (EMA200) (blue), the probability of a renewed correction extension to the lower edge of the downtrend channel around $24,000. As mentioned in the headline, Bitcoin is literally on a knife’s edge.
Bitcoin: Bullish price targets for the coming trading weeks
Bullish price targets: $26,832, $27,238/$27,560, $28,063, $28,473/$28,596, $28,872/$29,054, $29,847/$30,060 $30,404/$30,615, $31,049, $31,755, $32.403/$32.938
Although the buy-side was briefly left behind at the beginning of the week and had to let the bears do their thing, the bulls were there at the last moment in the area of the key support around $25,300 for the time being. However, this price setback in particular could have been good for the market, as it ensured that the significant overhang of leveraged long bets on Bitcoin were swept out of the market. As long as Bitcoin does not fall below the $24,000 mark at the end of the day, a price recovery in the coming weeks cannot be ruled out. From a purely technical point of view, the chance-risk ratio for buying Bitcoin is better than it has been since the price erupted in mid-March.
First, Bitcoin must establish itself above $26,832 at the end of the day. If Bitcoin stabilizes above this mark, the buyer side should plan the initially mentioned breakout above the green downtrend line around 27,500 US dollars and thus also a recapture of the EMA50 (orange). If there is no renewed sell-off and the trend continues, the view goes towards $28,063. Bitcoin was last unable to overcome this resistance level at the end of May.
If this area is then also overcome without a sustained false breakout, the recovery will extend to the red resist zone around the last high at $28,473. The super trend in the daily chart is also waiting just above at $28,596. If this area is pulverized, the golden pocket of the move will come into focus from the yearly high between $28,872 and $29,054. This is the short-term last chance for a price reversal for the seller.
A breakthrough should then allow the Bitcoin price to rise to the blue resistance zone between $29,847 and $30,060. The BTC course has failed here several times in recent months. It remains to be seen whether the buyer side has the strength to break through this area. If enough buying pressure can be built up, Bitcoin should start the year high at 31,061 US dollars and would have surprised all pessimists. The maximum price target for the coming period is unchanged between $32,403 and $32,938.
Bitcoin: Bearish Bitcoin price targets for the coming trading weeks
Bearish price targets: $26,121/$25,734, $25,351/$25,000, $24,389/$23,919 $22,814/$22,519, $21,977
Although Bitcoin missed the target of between $25,304 and $25,000 by a few dollars, it can still be considered completed. As long as the bears do not sell the BTC price back below the purple support zone, the chance for a price recovery prevails in the short term. Only a dip below $25,734 would bring the monthly low back into focus. Should Bitcoin not break out on the upside in the coming days and subsequently weaken again, a renewed sell-off in the direction of cross-support from EMA200 and the old breakout level should be kept in mind.
Whether this zone will hold a second time is difficult to predict. At least a short-term spike below this important area into the red support zone between US$ 24,389 and US$ 23,919 can no longer be ruled out. The reason for this is probably the desire of the market makers to trigger the stop-loss orders of the buyers around the weekly low and thus absorb liquidity. A simultaneous weakness in the US stock indices, which has not yet become apparent, would further increase the likelihood of this scenario. In addition, a parallel rising US dollar index would be another warning signal.
However, if Bitcoin does not find a foothold here and then breaks out of the trend channel to the south, the bullish chart picture would cloud over for a short time. A dynamic sell-off below $23,919 is likely to propel the bearish trend move into the $22,814-$22,519 zone. Given the uncertainty surrounding the SEC lawsuit, a dip back to $21,977 is also increasingly conceivable.
Looking at the indicators
The RSI as well as the MACD are currently trending neutral in the 4-hour chart. The RSI is floating between 45 and 55 and the MACD has activated a slight buy-signal below the 0-line. On a daily basis, the RSI has also worked its way back into the neutral zone, but a renewed price decline would generate a fresh sell signal here. In addition, the MACD continues to show a short signal.
In the weekly chart, the RSI indicator has now also dived back into the neutral area from above. In addition, the MACD is about to form a fresh sell-signal. Overall, both indicators still have a lot of room to the south if the bearish price scenario proves true. Not only the chart, but also the indicators are pointed on the button.
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