Bitcoin Retraces Following Failed Breakout
Bitcoin (BTC) has retraced to the $28,400 level after failing to break above $30,000. This has led to a high number of liquidations for both long and short positions. Additionally, the spread of fake news about the approval of Blackrock’s spot Bitcoin Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission has disrupted the upward trend and introduced bearish indicators in the Bitcoin market.
RSI Screams Sell
Crypto analyst Ali Martinez suggests selling BTC based on its 4-hour chart Relative Strength Index (RSI) indicator. His strategy advises selling when the RSI exceeds 74.21 and buying when it dips below 30.35. Currently, BTC’s RSI stands at 74, which is quite high considering that it reached 82.83 after the spread of fake news. This indicator has proven effective on BTC’s 4-hour chart in the past.
Although these indicators are not always guaranteed, the combination of the recent false pump, ongoing retrace in BTC charts, lack of bullish momentum, and prevailing market sentiment could lead to lower support levels before another upward movement.
Bitcoin Pre-Halving Retracements Sound Alarm Bells
Crypto analyst Rekt Capital has highlighted Bitcoin’s historical retracements approximately 180 days before halving events. In 2015/2016, Bitcoin experienced a retracement of -25% around this timeframe, and in 2019, it retraced by -38%. While Rekt Capital is generally bullish, historical data favors bearish trends before halving events.
This raises questions about whether history will repeat itself in 2023 and if Bitcoin will witness a significant retracement or deviate from previous patterns. Uncertainty looms regarding Bitcoin’s price behavior leading up to the 2023 halving.
Hot Take: Bitcoin’s Price Sustainability Remains Uncertain
Bitcoin is currently trading at $28,400 and has seen a modest increase of 1% in the past 24 hours. Despite earlier bearish factors, it has recorded profits of 3.7%, 4%, and 7% over the seven, fourteen, and thirty-day periods, respectively. However, the sustainability of Bitcoin’s current price level is uncertain, as potential retracements could still occur.
Featured image from Shutterstock, chart from TradingView.com
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