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The cryptocurrency market has been trading sideways in recent weeks and the leading token, Bitcoin, has followed a similar pattern. Despite numerous attempts in April, Bitcoin struggled to break the $31,000 mark. Price is blocked by daily Kijun at around $29,100 and psychological resistance at $30,000.
A correction to around $25,000 may be preferable in preparation for an extended bull run as long as this zone locks in prices. This would correspond to retesting the same resistance level at the beginning of the year and could be confirmed as a support level.
Bitcoin is struggling to overcome the resistance level: [email protected]tradingview
In the event of a breakout of $31,000, Bitcoin could continue to rise to $33,500. This will provide the next level of resistance ahead of a potential upside to $40,000. However, if the bears remain below the $25,000 mark, Bitcoin risks breaking the price spread, which could send the price below the $18,000 mark.
Related reading: Polygon bears gain strength as MATIC continues to retreat
Bullish sentiment based on external factors
Bitcoin is in good shape and could make a major bull run thanks to the following factors. First, the banking crisis plagues the United States and other parts of the world. Secondly, there is a gap between BTC and traditional markets. Finally, we can mention the deceleration of interest rates promised by the US Federal Reserve.
The failure of a Silicon Valley bank in early March is still wreaking havoc on the industry, and many Americans are afraid to put their money in a bank. Bitcoin’s recent price spike coincided with this, demonstrating its flexibility as digital gold.
Related Reading: UMA Token Up 28% Despite Overall Bearish Trend
Investors have sought to diversify their holdings into bitcoin for good reasons. Bitcoin does not need intermediaries; anyone can store BTC in their wallets without trusting a centralized institution. Bitcoin is a unique asset because of its volatility. Sometimes it shows a high correlation with stock indices. Although sometimes it diverges and forms its own channel. The following chart shows a comparison between gold, S&P500 and NASDAQ.
The Pearson correlation shows how close the behavior of BTC is to the behavior of some traditional assets. If banking and fintech stocks continue to fall, it is likely that there will be a massive influx of volume into the Bitcoin network, causing prices to skyrocket.
Finally, the Fed raised the interest rate to 5.25% per annum. This is the highest level since 1997. But the increase came with an additional announcement: no new increases (or cuts) are foreseen until the end of 2023. Typically, a stalemate or lower interest rates is a catalyst for higher prices for risky assets such as Bitcoin.
Bitcoin Price
At the time of writing, Bitcoin is down 2% in the last 24 hours and is trading at $28,826.
Bitcoin is trading below $29,000: [email protected]tradingview
-Featured Image by iStock, Charts by Tradingview
