Bitcoin (BTC/USD) Price Outlook:
Bitcoin Price Forecast: BTC/USD Threatens Bearish Reversal on Wedge Break
Bitcoin may be vulnerable to a deeper retracement as risk appetite waned and cryptocurrency sentiment soured to start the week. Price action has seen BTC/USD fall out of a rising wedge with price quickly cratering beneath $54,000 – its lowest level since May 5. While the volatility Bitcoin is experiencing is nothing new, the wild price swings can see technical levels disintegrate rather quickly.
Nevertheless, a few major levels remain in the proximity and they could look to influence price action as the week progresses. To the topside, Bitcoin could struggle with overhead resistance marked by prior highs. $58,200 likely serves as an initial barrier to further gains while $61,650 and $65,000 may serve as secondary and tertiary hurdles.
Bitcoin (BTC/USD) Price Chart: 4 – Hour Time Frame (January 2021 – May 2021)
Potential support may reside along recent swing lows slightly north of $52,000 while $50,000 may look to offer some buoyancy as a psychological level. Due to the recent breakdown it would seem support is at risk and Bitcoin will have to stave off lower-lows beneath the $46,750 area as a push beneath the April trough could begin to etch out a larger downtrend. Further still, longstanding technical support between the current spot price and the April lows is sparse.
That being said, Bitcoin still enjoys an optimistic outlook over the longer term. Months of gains have seen the coin push to record highs time and time again while enjoying mouthwatering returns in the process. Prior headwinds in the cryptocurrency space were centered around acceptance, regulation and practical use cases, which the recent wave of corporate adoption and public embrace have worked to resolve.
As a result of said adoption, cryptocurrency has become a household term and Bitcoin’s recent dilemma of losing out to lesser-known and more volatile alternatives is rather pedantic when observed in the bigger picture. In the meantime, keep up to date on recent price developments and analysis using Twitter by following @PeterHanksFX.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX