Bitcoin’s horizontal levels show bullish trend potential
After regaining its bullish momentum, the largest cryptocurrency in the market, Bitcoin (BTC), briefly broke above its key resistance level of $28,700. However, the cryptocurrency pulled back and returned to trade within the range formed last week between $27,600 and $28,500 .
Despite this choppy price action, a recent blog mail by Justin Bennett, trader and analyst of the crypto market suggests that BTC has established “strong” horizontal levels, which are favorable for both scalpers and investors who prefer this period of range or consolidation in the market.
Will these horizontal levels have a potential decline in BTC’s price?
Bennett further mentions that Bitcoin is trading above the $28,130 pivot point on an hourly and 4-hourly close basis. Any attempt to retest this level is likely to attract sellers, potentially triggering another run to the $27,650 support floor and potentially lower prices.
Although the horizontal levels seen in the chart could provide opportunities for scalping, Bennett cautions that there is a potential downside risk if BTC’s support levels are breached.
Bennett suggests that while BTC’s price has no confirmed direction, there are currently more long liquidations below the price than short liquidations above. This means that a higher number of traders have taken long positions and may be at risk of liquidation if the price falls further over the weekend.
However, with Bitcoin trading above the key point, there is still potential for further upside and consolidation above the $29,000 level. The macro resistance level of $28,900 is the next target for BTC and a successful breach could lead to further gains for the largest cryptocurrency in the market.
Bennett further suggests that the primary range for Bitcoin is between $26,500 support and the $28,900 resistance wall, with smaller areas within this range. This can lead to the price movement being relatively stable within this area. Nevertheless, there is a potential for significant volatility if the price breaks out of this area and experiences a correction towards the support level.
A new cycle has just begun for Bitcoin
According to Rekt Capital, with the close of Q1 for Bitcoin and the broader cryptocurrency market, BTC is on the verge of confirming its first bullish quarterly engulfing candle since early 2020. This pattern occurs when the opening price of a particular quarter is lower than the closing price of the previous quarter.
According to Rekt, this pattern has historically preceded several quarters of upside for Bitcoin, meaning that BTC’s price tends to rise for several quarters after the pattern is confirmed, such as in the bull market of 2021.
Although Bitcoin’s price is experiencing a short-term decline, cryptocurrency market sentiment seems to point to one thing: BTC is poised for another bull run.
The market is expected to undergo a sustained period of price increases in the coming months, with the first quarter ending above key levels. This suggests strong potential for growth and investor confidence despite short-term fluctuations in Bitcoin’s price action.
Featured image from Unsplash, chart from TradingView.com
