• Bitcoin could be in for a quick rebound back above the $30,000 level if it follows a historic trading pattern.
• According to an article released by Bloomberg, after Bitcoin has jumped by at least 3% one day only to then give back the entirety of this gain the next day, it typically rebounds by around 7% within a three-to-ten-day period.
• Chart analysis is sending more pessimistic signals than the historic trend analysis with support levels in the $26,500-$25,400 range potentially on the cards.
Historic Trading Pattern Could Lead to Quick Rebound
Bitcoin could be in for a quick rebound back above the $30,000 level in the coming days if it follows in the footsteps of a historic trading pattern that looks to be unfolding. According to an article released by Bloomberg, after Bitcoin has jumped by at least 3% one day only to then give back the entirety of this gain the next day during a broadly bullish period for the cryptocurrency, it typically rebounds by around 7% within a three-to-10-day period. For reference, Bitcoin jumped 3% on Tuesday before dropping 5% on Wednesday meaning it is currently in line with this historic pattern. If Bitcoin was to see a quick 7% jump from Wednesday’s close near $28,800, it would be back just below $31K.
Pattern Historically Accurate
The above pattern has played out 17 times during bullish market periods over the last five years according to Bloomberg. Bullish market periods were defined as Bitcoin’s 14-Day Relative Strength Index being above 50 (it was above 50 on Wednesday but fell just below 50 on Thursday).
Chart Analysis Paints More Pessimistic Picture
While there may some reason for optimism about an incoming Bitcoin price bounce based on historical trends analysis chart analysis paints a more pessimistic short term picture. At present time bitcoin is down 1%, trading near $28,500 and has fallen below its 21 Day Moving Average (at $29k) and an uptrend from late March lows. This opens up possibility of testing further support levels such as downtrend linking late March/early April highs ($28k area), 50DMA ($26500) and long term support turned resistance zone between $25200 – 25400 area should BTC fall further downward.
Macro Outlook Positive
Despite significant uncertainty about how many more times US Federal Reserve will lift interest rates and when they will start cutting them one thing seems certain – end of Fed tightening cycle looks close as US inflation and economic growth decelerate. This implies that macro is unlikely to return as major headwind to crypto markets like 2022 which combined with continued crypto adoption and progress towards legal recognition bode well for future prices regardless of what happens next few days or weeks .
Conclusion
There are both optimistic and pessimistic signs for bitcoin currently depending whether you focus on short term chart patterns or longer term techincal indicators and macro outlooks respectively . Historic trend analysis suggests that we may soon see quick rebound while chart analysis paints more gloomy picture with potential test of key support levels ahead .