The Bitcoin spot price (BTCUSD) has been generating significant buzz in recent weeks, especially after the eagerly awaited approval of the first 11 Bitcoin ETFs by the SEC. The initial enthusiasm surrounding the approval led to a surge in prices, fuelled by traders anticipating greater accessibility and institutional adoption.
However, the approval triggered a “sell the event” scenario, causing the spot price to dip by over 10% from its recent peak near the two-year high of $49,000. Many traders opted to secure profits following the initial spike, resulting in a bearish pullback after the substantial surge witnessed throughout 2023. As we embark on a new week, the question arises: what awaits the spotlight-grabbing cryptocurrency?
Technical
On the daily chart, the recent pullback has broken the existing uptrend while pushing the price below the 25-SMA (green line) and the 50-SMA (blue line), suggesting a bearish shift in the market’s mood. Volumes have been increasing, signalling the potential for a more prolonged pullback in the sessions to come.
On Monday, there was a rebound on the market open, retesting the 50-SMA at $42,683. This could be a critical juncture, as failure to exceed the resistance level could signal that the bears are maintaining the upper hand. There is a consolidation range present with support at $40,194, and a breakdown at this level could trigger a steeper downtrend toward $38,099, where the 100-SMA (orange line) could hold some buyers.
However, if the 50-SMA resistance fails to withhold the current retracement, the price could retest the level at which it broke down the prior uptrend near $44,823, the upper resistance of the trading range. Any movement above this level could signal that the recent breakdown was temporary, potentially enticing the buyers to retest the 61.8% Fibonacci golden ratio at $48,619 in the upcoming sessions.
Summary
After the SEC approval of spot Bitcoin ETFs last week, the spot price was under pressure from the profit-taking behaviour among traders. The 50-SMA resistance could now hold clues about whether Monday’s bounceback will be sustained or just set the price action up for a longer pullback toward $40,194.
Sources: Koyfin, Tradingview, Reuters, Forbes
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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