Bitcoin takes us on a crazy trip these days. It blasted past the 20-day exponential moving average (EMA) resistance, hitting an impressive $85,332 on March 19 before quickly retreating back below that level the following day. The price action reflects some serious fighting between the bulls and bears, as we now have the bears defending higher levels to this point in time. Many analysts believe Bitcoin has formed a bottom at $77,000, even after this recent move to the downside. They think this stability is supported by the Federal Reserve’s tentatively good news of announcing a slowdown in quantitative tightening beginning in April. The cryptocurrency is now undergoing an extremely critical test as it maneuvers through various resistance levels and looks to form a new and sustainable uptrend.
The 50-day simple moving average (SMA) at $91,136 likely will act as a major obstacle for Bitcoin. The 20-day EMA has begun to turn up, providing us with a more robust signal. At the same time, the Relative Strength Index (RSI) just broke into positive territory. Buyers are showing a minor edge. The recent breach below the 20-day EMA suggests that sellers are increasingly willing to step in at higher price levels. Investors are closely monitoring Bitcoin's ability to regain and hold above the 20-day EMA as a signal of renewed bullish momentum.
Key Resistance and Support Levels
Bitcoin’s short-term picture is bullish above $640 with immediate challenge seen at resistance around $644. If Bitcoin can manage a clean break and close above this level it might open the path for a rally towards $686. Sellers are preparing to make a firm stand at $686. If they do end up failing and this level is broken, we might get a dangerous move to $745. These resistance levels mark important areas where selling pressure will probably ramp up.
Bitcoin will likely face its first support at the 20-day EMA. This level has proven to be consistent support during all prior uptrends. If the price can consistently stay above it, then the bullish outlook will be greatly strengthened. If sellers manage to push below the 20-day EMA, we might see a retest of support at lower levels, which would raise the risk for a deeper downside.
Technical Indicators and Market Sentiment
The technical indicators present a pretty mixed picture for Bitcoin. The rising 20-day EMA and the RSI in the positive territory point to the buyers’ strength. The lack of follow-through on the breakout above the 20-day EMA shows that the market is still wary. A clear and sustained move above the 20-day EMA would signal that sellers have lost control again. If so, it might mark the start of a more permanent upturn.
Market sentiment around Bitcoin is affected by macroeconomic factors, like the Fed’s monetary policy. The previously announced slowdown in quantitative tightening has since been interpreted as a pivot and a sign of support for risk assets, including crypto. This ongoing development would further support a bullish case for Bitcoin and has played a role in its continued recovery since September.
Altcoin Performance and Bitcoin's Outlook
Altcoins such as Chainlink (LINK) provide the best insights into the current health of the cryptocurrency market. This makes their combined performance a reasonable gauge for Bitcoin’s potential near-term trajectory. On the upside, if the bulls manage to break the LINK/USDT pair above the 50-day SMA ($16.83), it will indicate that the market has taken control. An increase to $19.25 would increase bearish inclination for the overall market, including BTC. This would be a sign that investors reinvigorated risk appetite and are gearing up to deploy capital into altcoins.
Looking forward, Bitcoin needs to push up through resistance around $686. It must overcome the 50-day SMA barrier at $91,136 to decide its next course. In such a case, a successful breakout above these levels would likely send the price to retest the $95,000 mark. It might even cross the psychologically significant $100,000 barrier. Not addressing these obstacles may lead to more consolidation or a larger correction. If the duo climbs to the 50-day SMA at $0.22, that will indicate strong bullish momentum. An additional rise to $0.29 would reaffirm the bullish sentiment for Bitcoin.
