As BTC price is trapped in the $34,000-$45,000 zone, relief rally prospects grow.
According to a technical setup supplied by Rekt Capital, a pseudonymous market analyst, Bitcoin (BTC) appears prepared to challenge the $43,000 level in March.
BTC recovers from a strong 2022 support level
Bitcoin’s decline toward $37,000 yesterday sparked minor purchasing sentiment, resulting in a March 8 price bounce above $39,000. Surprisingly, the positive retracement began near the same upward sloping trendline that served as an accumulation zone in 2022.
Update after 2 months:
Too many retail investors on derivative exchanges could be a bearish signal.
The good news is that we have some whales who are accumulating $BTC in this price range of 35k-45k lately.
Live Chart 👇https://t.co/N7kJnbe06k pic.twitter.com/gK9AtzGoy6
— Ki Young Ju 주기영 (@ki_young_ju) March 8, 2022
In his latest view, Rekt Capital noted the successful retest of the trendline, indicating that the move might push Bitcoin above $43,100 next, assuming it breaks above the green dashed diagonal resistance displayed in the chart below.
“Successful retest here and BTC may actually replicate last week’s move,” Rekt Capital wrote on Tuesday.
Bitcoin to $30K?
The interim positive prognosis was evident as Bitcoin remained trapped inside a large trading range — between $34,000 and $45,000 — for the entirety of Q1/2022. Thus, BTC resisted extreme selloff pressure exacerbated by continued macroeconomic and geopolitical concerns, including as rate rise fears and the military war between Russia and Ukraine.
— Sideways
— 32-34k key support, 43-47k key resistance
— Headline algo trading + correlation chop in between
— Mid-term bull. momentum case validated if 43-47k finally breaks (tested several times)
— Sideways = wait for extremes/boundaries to trade, not there yet pic.twitter.com/RsytMYajWf— DonAlt (@CryptoDonAlt) March 8, 2022
Filbfilb, cofounder of trading platform DecenTrader, also observed this weekend that “Bitcoin remains rangebound on a global level,” but its long-term structure predicts an upside breakout.
“In the short term, if the 50 DMA and 3-day level can be sustained, a retest of the $43k and high timeframe levels is possible,” Flibflib explained, adding that a further break above Bitcoin’s yearly pivot level of $48,000 would be “very significant and indicative of a fundamental change.”
However, Rekt Capital’s upside setup indicated that Bitcoin’s rally toward $48,000 is unlikely to continue. That is because the setting resembles a bearish “ascending triangle” pattern, which is a consolidation range that often pushes the price lower following a breakout move.
Notably, an ascending triangle’s profit objective is derived by subtracting the maximum distance between the pattern’s two trendlines from the breakout level.
According to the chart below, the breakout point may be anywhere between $37,500 and $45,000, implying that a successful break below the triangular range might result in Bitcoin falling to between $30,000 and $35,000.
Interestingly, both $30,000 and $35,000 have historically served as sturdy support levels.
Is Bitcoin nearing a bottom?
Additionally, Flibflib pointed out that the $30,000 level coincides with the bottom of Bitcoin’s logarithmic regression bands — a “tried-and-true” support level.
“The good news is that Bitcoin has a shorter distance to fall because it did not rise as quickly,” the analyst explained, adding:
“The confluence with this now sitting at the bottom of the weekly range is significant in our opinion and supports the idea that we will not see such a drawdown as in previous cycles.”
Nonetheless, a strong capitulation event at the $30,000 level could reintroduce Bitcoin’s downside objective of the 200-week simple moving average (200-week SMA), a “catch-all” level that marked the end of previous bearish cycles in March 2020 and December 2018.
The cost of the 200-week SMA is approximately $20,000.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
