Bitcoin Outlook: NeutralBitcoin prices rebound to end the week in the green BTC/USDbreaks $40,000 but risk sentimentremains vulnerable to development
Bitcoin Outlook: Neutral
- Bitcoin prices rebound to end the week in the green
- BTC/USDbreaks $40,000 but risk sentimentremains vulnerable to developments in the Russia, Ukraine war
- Technical levels hold firm as price action tests another big spot of resistance
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Bitcoin Reclaims $40,000 But Big Levels Limit Gains
It’s been a positive week for Bitcoin and other cryptocurrencies as a more ‘risk-on’ sentiment supported the demand for equities and digital assets, pushing prices higher. Although Bitcoin remains vulnerable to elevated geopolitical risks and increased volatility, key technical levels have provided firm levels of support and resistance which continue to hold both bulls and bears at bay.
However, after being trading in a relatively narrow range, the executive order signed by US President Joe Biden promoting the responsible development of digital assets and the legalization of cryptocurrencies in Ukraine provided a more optimistic outlook for the industry, allowing Bitcoin bulls to drive prices back above the key psychological level of $40,000 which remains as a big level of support.
With price action currently testing trendline resistance at around $41,000, bulls now need to clear the next level of resistance at the $43,352 Fibonacci level (the 38.2% retracement of the April – May 2021 move) which may open the door for a move towards the 50-day MA (moving average), currently holding at $46,188.
Bitcoin (BTC/USD) Weekly Chart
Source: TradingView, Chart by Tammy Da Costa
Meanwhile on the daily time-frame, BTC/USD is currently trading above the 50-day MA (moving average) which has formed an additional layer of support, just above the big $40,000 mark. While the MACD (moving average convergence/divergence) remains in negative territory (a potential indication that the bearish trend remains intact), a crossover below the zero line suggests that bears may be losing steam.
Bitcoin (BTC) Daily Chart
Source: TradingView, Chart by Tammy Da Costa
If bears manage to regain control of the trend, a break below $40,000 could give rise to a retest of $38,257 (the 23.6% retracement of the above-mentioned move) with the next big spot of support holding at $36,000.
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
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