Bitcoin started 2024 with a bang, as a first-quarter rally propelled the price up to a new all-time high around $74,000 in mid-March. Over the next six weeks, bitcoin has been decidedly rangebound, rotating between support around $60,000 and resistance around $72,000. With bitcoin finally breaking below that support level at $60k this week, we see much further downside potential before the long-term uptrend resumes. If we look at the recent trading range in a little more detail, we can see how recent support around $60,000 lines up with the 38.2% Fibonacci retracement level using the January low and March high. It’s also clear that the subsequent tops in late March and early April represented failed attempts to push to another new all-time high. You may also notice the breakdown below an ascending 50-day moving average during the second week in April. Bullish charts tend to remain above an upward-sloping 50-day moving average, while a break below this short-term support gauge can indicate a potential trend reversal. Going into May, bitcoin is making lower lows and lower highs, and now sits below a downward-sloping 50-day moving average. Analysis of price momentum, using the RSI indicator, shows that Bitcoin has now rotated from a bullish phase to a bearish phase. From October 2023 to April 2024, the primary trend in price coincided with the RSI remaining above the 40 level on pullbacks. Now we are seeing a more bearish configuration, with the RSI well below the 60 level on countertrend rallies. BTC.CM= 1Y mountain Bitcoin, 1-year Where could we expect potential support if the downtrend continues? There appears to be a confluence of support in the $50,000 to $52,000 range, including the 61.8% Fibonacci retracement level around $52k. The 200-day moving average is right around there, and big round numbers like $50k and $60k have often served as important thresholds for the cryptocurrency. With the latest bitcoin halving now behind us, it’s worth noting that the cryptocurrency has often sold off in the month after the halving, but the 12 months post-halving have included some of the most bullish upswings in history. So while we remain encouraged by the long-term picture for bitcoin, the short-term picture indicates more weakness likely ahead. -David Keller, CMT marketmisbehavior.com DISCLOSURES: (Owns bitcoin) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT…
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