Bitcoin Price Faces Liquidity Test at $53,000
Bitcoin price encountered a liquidity test at $53,000, resulting in a sell-off and a drop below $52,000. This level had become significant for traders last week. As of Wednesday, the leading cryptocurrency is barely holding above $51,000 with a 2.2% drop in 24 hours. If the daily candle closes below $52,000, it could indicate a further downward shift with potential support areas at $50,000 and $48,000.
The Potential for Bitcoin Price to Reach $500k
Bitcoin has seen substantial growth recently, largely due to the positive outlook for the US Bitcoin ETF. This surge in Q4 led to BTC surpassing $42,000 by the end of the year. The transition of Grayscaleโs Bitcoin Trust to the GBTC ETF has increased market fluctuations but also attracted institutional investors.
With the upcoming halving in April and reduced supply of BTC, coupled with high-risk appetite for ETFs, Bitcoinโs bullish outlook is expected to continue. Michaรซl van de Poppe predicts that Bitcoin has the potential to reach $500k. However, he advises investors to be cautious as corrections are likely to occur.
The overly bullish sentiment is great for #Bitcoin.
Long-term, a likelihood of Bitcoin reaching $500K is definitely there.
However, corrections will happen and they’ll be rough.
If Bitcoin corrects by 20% or more, use those as a giant buying opportunity.
That’s it.
— Michaรซl van de Poppe (@CryptoMichNL) February 21, 2024
Technical Analysis and Support Levels
In the four-hour chart, traders are looking for Bitcoin to stay above the 50-day Exponential Moving Average (EMA) and maintain stability within the rectangle pattern to confirm a rebound above $52,000. However, indicators like the Moving Average Convergence Divergence (MACD) suggest a bearish sentiment that could lead to a larger correction below $50,000.
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To capitalize on potential dips, investors should consider implementing a dollar-cost average strategy and buy at various price levels down to $48,000. Traders will also be monitoring for a breakout above the $53,000 resistance level, which could signal a stronger uptrend towards $54,000 and potentially higher before the halving.
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