Bitcoin (BTC), the market’s largest cryptocurrency, briefly broke above its crucial resistance level of $28,700 after regaining its positive momentum. Nevertheless, the cryptocurrency retreated and returned to trading within the previous week’s range of $27,600 to $28,500.
Notwithstanding this tumultuous price movement, a recent blog article by Justin Bennett, a crypto trader and analyst, says that BTC has formed “strong” horizontal levels, which are good for both scalpers and investors who enjoy this period of market range or consolidation.
According to Bennett, Bitcoin trades above the $28,130 pivot mark on an hourly and 4-hour closing basis. Any attempt to retest this level would almost certainly attract selling, potentially resulting in another run at the $27,650 support floor and lower prices.
Although the horizontal levels displayed in the chart may present opportunities for scalping, Bennett warns that if BTC’s support levels are breached, there is a significant downside risk.
Bennett claims that, while the price of Bitcoin has no clear direction, there are currently more long liquidations below the price than short liquidations above it. This suggests that a greater number of traders have taken long positions and may be forced to liquidate them if the price falls further over the weekend.
Yet, because Bitcoin is trading above the important pivot point, there is still room for further gains and consolidation above $29,000. The next goal for BTC is the $28,900 macro resistance level, and a successful break might lead to more rises for the market’s largest cryptocurrency.
Bennett goes on to say that Bitcoin’s core range is between $26,500 support and the $28,900 resistance wall, with smaller ranges within this range. As a result, price fluctuation within this range may be quite stable. There is still the possibility of severe volatility if the price breaks out of this range and corrects toward the support level.
At the end of Q1 for Bitcoin and the larger cryptocurrency market, BTC is on the approach of completing its first bullish quarterly engulfing candle since early 2020, according to Rekt Capital. This pattern happens when the opening price of a specific quarter is lower than the preceding quarter’s closing price.
According to Rekt, this pattern has historically preceded multiple quarters of Bitcoin upside, implying that the price of BTC tends to rise for several quarters after the pattern is confirmed, like in the 2021 bull market. Even if Bitcoin’s price falls in the near term, the cryptocurrency market’s sentiment appears to point to one thing: BTC is prepared for a new bull run.
In the following months, the market is likely to experience a sustained period of price increases, with the first quarter concluding above crucial levels. Despite short-term volatility in Bitcoin’s price, this indicates a high potential for growth and investor confidence.