Over the past five days Bitcoin 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.
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.
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.
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.
