Bitcoin saw a price reversal after hitting $88,874, facing key resistance at the 200-day SMA. Some traders predict a 10-15% dip while others remain optimistic about macroeconomic support for recovery.
Bitcoin traders are observing a potential price reversal as the cryptocurrency hits a ceiling at around $89,000. After reaching new highs for April at $88,874, Bitcoin (BTC) seems to be cooling off, caught under that ominous 200-day simple moving average (SMA). While the enthusiasm was palpable at the start of the week, investors’ spirits were quickly dampened as resistance proved tough to break, stopping bullish momentum in its tracks.
Popular trader Daan Crypto Trades provided insights on social media platform X, explaining that after notching above the 200-day exponential moving average, Bitcoin faced a sharp rejection from that same crucial 200-day SMA. “Fun won’t start until we get some daily closes back above the previous range low at ~$90K. Important to hold ~$85K below I’d say,” he indicated, hinting at the market’s precarious position.
The 200-day SMA is typically a reliable support level during bullish runs; however, it slipped through Bitcoin’s fingers in March as external pressures – notably from a US trade war – sparked a sell-off. Following that, Bitcoin dipped below $75,000 for five months. Though the current rebound might bring some hope, not everyone is convinced this rally will hold.
Trader Roman chimed in, expressing concerns about the stochastic relative strength index (RSI) which, interestingly, is hovering in the “overbought” range. He pointed out a correlation between momentum shifts: “As we approach horizontal resistance, I wanted to show that the last 4 times stoch RSI has been overbought, we’ve seen a 10-15% correction,” he stated, remarking that this would align neatly with declines in the S&P 500.
Indeed, the daily stochastic RSI peaked at the top of its scale just on April 22, feeding into these cautious forecasts. Other market aficionados, however, see a different picture, focusing on macroeconomic elements that might lead to further Bitcoin gains.
As reported by Cointelegraph, factors such as a declining US dollar and record highs in the global M2 money supply suggest that Bitcoin could find itself on a strong upward trajectory again. “In the past few weeks, I’m looking at different on-chain data and global events which makes me believe that BTC reversal has started,” noted trader Cas Abbe on the same platform.
Dismissing notions of a “bull trap,” Abbe highlighted significant whale accumulation and a renewed Coinbase premium, both indicators that stability could be in sight. He added, “I believe that $74K-$75K zone was the bottom for $BTC. Most alts have also bottomed out and we could see a sustained rally,” projecting optimism despite the current market turbulence.
In conclusion, Bitcoin appears to be facing a potential dip with traders forecasting a 10-15% correction after encountering tough resistance near $89,000. Analysts like Daan Crypto Trades and Roman are highlighting the importance of key support levels and overbought signals. Meanwhile, traders like Cas Abbe remain hopeful or even bullish, citing favorable macroeconomic conditions. Will Bitcoin manage to recover, or are we just coming off another high? The coming days will be crucial for BTC’s market trajectory.
Original Source: cointelegraph.com
