Despite altcoins’ relative performance in 2023, Bitcoin has seen a significant 75% bullish rally since the beginning of the year. However, bitcoin price gained momentum towards a pullback towards the $25,000 support this week. New lows close? Let’s take a look at what technical analysis says…
Bitcoin rally loses speed at $30,000
The annual upward move in Bitcoin price fueled by the banking crisis in March may be hitting a roadblock at the $30,000 resistance level. To assess the underlying dynamics of BTC, we need to look at an expanded chart that provides a longer-term perspective spanning several weeks.
Historically, bullish reversals in this timeframe have shown a well-defined chart structure with phases of bullish impulses followed by sideways. As Kriptokoin.com, we have conveyed the expectations of the experts in this regard.
The recent bullish reversal in the last quarter of 2022 followed by a rebound from $20,000 that started the current rally was followed by a notable bullish momentum divergence (like the RSI) from the oversold zone.
BTC price could return to these bottoms
The RSI has entered the overbought zone as BTC approaches the $30,000 resistance level. The overall chart is similar to August 2020, which saw a pullback from $12,000 to $9,500 before the subsequent bull run that started in October 2020.
Considering the technical possibilities, a pullback scenario towards the main $25,000 support is likely. Therefore, maintaining the $25,000 support level could be the key factor to invalidate the uptrend in 2023. This pullback scenario could be triggered by a break of the short-term support at $28,800; The upper part of the bearish range opened on Monday, June 13, 2022.
The market is on an unstable edge after a significant long liquidation session. To avoid a possible return to $25,000, the market will need to bounce convincingly from the $28,800 level and break above the intermediate resistance at $29,500 to signal renewed bullish momentum. The situation remains fluid and further price action will provide more insight into the direction of BTC’s price action.
The effect of interest rates and the US dollar on Bitcoin price
Bitcoin is currently at the crossroads of a crucial breakout and the market is expected to decide in the coming hours. This decision is likely to be influenced by two key factors from the inter-asset class dynamics: the trend of market interest rates and the behavior of the US dollar on Forex, returning to its annual low and acting as a support level.
If the recovery continues and a support break above the US dollar, this could negatively affect Bitcoin’s price and increase the possibility of a drop towards $25,000. On the other hand, if the recovery in interest rates is interrupted and the support level of the US dollar is maintained, it may counter the scenario of decline towards $25,000. Ultimately, the market will determine which direction Bitcoin will take.
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