Is Bitcoin Poised for Another Run or an Imminent Crash?

Bitcoin (BTC) has recently experienced a correction from its all-time high of $73,835 to around $66,980. The recent correction after reaching all-time highs has some analysts cautious, while others see it as a buying opportunity. The spot Bitcoin ETF market flows remain a point of focus, with outflows potentially impacting demand. The Fear and Greed Index hovering near “Extreme Greed” suggests a potential pullback, but a reversal in inflows could spark a return to new highs. 

Nevertheless, bullish undercurrents still remain. Some analysts highlight dwindling Bitcoin reserves on exchanges, often a precursor to price surges. Additionally, shorts appear to be capitulating, potentially leading to a short-term price increase as they buy back to cover their positions. The upcoming 2024 Bitcoin halving, an event that historically reduces supply and boosts prices, further fuels bullish sentiment. 


The 4-hour chart shows Bitcoin’s price is trading tentatively at 66,980.13 as the recent recovery that sent the price action above both the 20 (green line) and 50-SMA (blue line) finds significant resistance around the 100-SMA (orange line). Despite the price action’s recent break above the 20-SMA and 50-SMA, it finds itself trading below the 100-SMA, which resides at the 23.60% Fibonacci retracement level-enforced supply zone, which could act as a significant resistance to the price action’s attempt for higher ground.  

The RSI (59.73) remains above the 50.00 level, suggesting bullish sentiment. A sustained breakthrough above the 100-SMA could offer short-term trading opportunities towards the $71,398.97 resistance level. A break above the initial resistance could trigger a bullish run, likely bringing the all-time high of 73,835.57 within the bulls’ reach in the near term.  

Conversely, with the recent break of the shorter-term SMAs below the 100-SMA suggesting bearish short-term momentum, a price rejection at the current resistance zone could leave the 38.20% Fibonacci retracement level (65,090.14) as the initial level of interest lower. A sustained break below the level could confirm the bearish momentum and would likely bring the 50.00% (62,388.68) and 61.80% Fibonacci retracement level (59,687.21) into play in the short term. 


While BTC faces short-term uncertainties amidst corrections and market sentiment fluctuations, the combination of fundamental support levels and technical indicators suggests a potential for both upside and downside movement. Technically, overcoming the $68,000 resistance zone could propel it towards new highs, especially with the upcoming halving event. Conversely, a rejection at this level might trigger a correction. 

Sources: TradingView, Trading Economics, NewsBTC, Cointelegraph, Coin Edition. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

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