Bitcoin Charts Indicate Potential Breakout Amid Macroeconomic Tensions
Summary:
Popular Bitcoin charts suggest a potential price breakout from the current range, with an inverse head and shoulders pattern indicating a reversal of a previous downtrend. Crypto investor Quinten Francois and anonymous crypto analysts Jelle and Mags predict upward momentum for Bitcoin. However, CEO of Turbofish, Matt Bell, warns of the precarious environment around Bitcoin, with macroeconomic events and key indicators such as the CPI potentially disrupting prices. On the horizon is a significant resistance level of $63,500 to $63,700, and surpassing this could see major losses in leveraged short positions.
Prominent Bitcoin charts are suggesting a potential price breakout from the current range for Bitcoin (BTC). Yet, macroeconomic events this week could also have a substantial effect on the price. Could it be possible for Bitcoin to experience a bullish breakout?
A recent inverse head and shoulders pattern, which traders use to predict a previous downtrend reversal, was noticed on the four-hour Bitcoin chart. Crypto investor Quinten Francois explained in a May 13 post that, based on this technical formation, a trendline breakout could lead to a positive rally for Bitcoin.
Francois noted, "An inverse head and shoulders pattern is visible on the $BTC chart. It might not be the most refined pattern but it serves the purpose. There are several ways to sketch the neckline, but I've chosen the most sensible approach. Breaking the neckline could further recover the price!".
Bitcoin is on the verge of resetting some important technical indicators. The moving average convergence/divergence (MACD), which measures changes in an asset's strength and direction, is included. A full reset could indicate further upward momentum, according to the anonymous crypto analyst Jelle's May 13 post.
The daily chart of Bitcoin showed a relative strength index (RSI) of 49, which had increased from 33 on May 1. This points towards the current fair value of Bitcoin. The RSI is a widely utilized momentum indicator that gauges whether an asset is oversold or overbought.
Echoing previous predictions, Mags, an anonymous crypto trader is also anticipating a price breakout based on crucial technical indicators, he shared a chart corroborating his thoughts in a May 13 post with his 74,200 followers.
Despite the potential bullish breakout, current sentiment around Bitcoin is precarious, particularly with upcoming macroeconomic events such as the Consumer Price Index (CPI) on May 14, which may significantly influence the short-term price according to Turbofish CEO, Matt Bell.
While referencing to the Inverse Head and Shoulders pattern implying a possible trend reversal, Bell stressed the importance of considering that Bitcoin's price action is still confined within a narrow trading range. Changes in the US macro data and insights from Federal Reserve's chair Jerome Powell could create a new wave of volatility in the crypto market.
Bitcoin's recent drop to $56,000 has perhaps marked the local bottom, says popular crypto analyst Rekt Capital. "If the current downward trend doesn't end at $56,000, this pullback will mark the longest in the current cycle at 63 days. However, history suggests the pullback likely ended at $56,000 after 47 days."
Bitcoin moved beyond the $65,000 mark, ending the distribution danger zone on May 6. Nevertheless, there's significant resistance around the $63,500 and $63,700 levels. A move above $63,700 could eradicate over $516 million in leveraged short positions.
As always, investments involving Bitcoin carry inherent risks and potential investors should perform their own due diligence ahead of making a decision.
Published At
5/13/2024 7:24:58 PM
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