Bitcoin Rebounds Over 12.50%: Bull Run Predicted Amid Interest Rates, Employment Data
Summary:
Bitcoin's price has rebounded by over 12.50% in three days after reaching a two-month low, with support from the US Federal Reserve's decision to maintain interest rates and positive US employment data. Technical price charts hint at a possible price correction, with the Bitcoin Net Unrealized Profit/Loss (NUPL) metric, suggesting that sizeable unrealized gains could drive further price increases. Some analysts remain optimistic about Bitcoin’s future, predicting a bull run that could boost Bitcoin's price to $85,000 or even to a six-figure sum.
Just three days after plunging to a two-month low of nearly $56,550, Bitcoin (BTC) value bounced back by over 12.50%, topping $64,000 on May 4. Contributing to this resurgence, the U.S. Federal Reserve committed to keeping interest rates steady until 2024. Moreover, positive employment data from the U.S, showing the lowest jobless claims since mid-February, strengthened Bitcoin's price recovery.
Will Bitcoin sustain its upward trajectory, or is the market bracing for another nosedive?
Technical price charts suggest Bitcoin could undergo a slight correction in May. As of May 4, Bitcoin aimed for a conclusive close over its 50-day exponential moving average (50-day EMA; the red wave in the chart) at approximately $63,966. If achieved, the price might escalate towards the 0.786 Fibonacci retracement line near the upper trendline resistance at roughly $69,650.
Despite surpassing the 50-day EMA on May 4, Bitcoin hesitated to keep up the momentum for an additional breakout, facing opposition near the 0.5 Fibonacci retracement level of about $64,895. If Bitcoin cannot break this resistance convincingly, it could enter a period of stability or potentially reverse. In such an event, the next lower target could be around an ascending multi-month trendline support (the purple line) at nearly $60,500 in May. A further break below this support could send the Bitcoin price down to the 0.0 Fibonacci retracement level near $56,580 in May.
Correspondingly, the Bitcoin Net Unrealized Profit/Loss (NUPL) metric hit 0.54 as of May 4. This suggests a large proportion of Bitcoin holders have considerable unrealized profits. Generally, a NUPL value over 0.5 signals a bullish market sentiment, potentially driving further price increases. Be that as it may, the NUPL is currently dropping from the 2024 peak of 0.68 and consequently, Bitcoin's price could face a downturn in the months ahead due to this on-chain indicator.
Despite the potential downturn, some market analysts remain hopeful about a lasting Bitcoin bull run. Independent market analyst SHIB Knight predicts Bitcoin's price could skyrocket to $85,000 citing a bullish flag pattern. Another analyst, Steph is Crypto, predicts Bitcoin price hitting six-figures owing to a so-called relative strength index (RSI) breakout.
As of May 4, Bitcoin's RSI was surpassing a descending resistance trendline, similar to breakouts in January 2024 and October 2023. These RSI breakouts spurred significant bull runs, including Bitcoin's surge to $75,000 in March 2024.
Published At
5/4/2024 7:04:04 PM
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