Bitcoin could quickly rebound above the $30,000 level in the coming days if it follows in the footsteps of a historic trading pattern that currently appears to be in its early forming stages.
According to an article published by Bloomberg, after Bitcoin jumped at least 3% on one day and then lost all of those gains the next day during a broadly bullish period for the cryptocurrency, it typically rebounds around 7% in a period of three to ten days.
For reference, Bitcoin registered a 3% rise on Tuesday, before falling 5% on Wednesday, meaning it is in the early stages of this historic pattern.
If Bitcoin were to see a quick 7% rebound from Wednesday’s close near $28,800, it would return to just below $31,000.
According to Bloomberg, the above pattern has occurred 17 times during bull market periods over the past five years.
Bull market periods were defined as the intervals in which Bitcoin’s 14-day Relative Strength Index was above 50 (it was above 50 on Wednesday, but fell just below 50 on Thursday).
Is Bitcoin about to rebound?
While the above analysis from Bloomberg suggests that there may be reason to be optimistic about a resumption of Bitcoin’s bullish trajectory, technical chart analysis presents more pessimistic signals, at least for traders. very short-term price outlook.
Bitcoin was last down just over 1.0% in the day on Thursday and was trading near $28,500. As the day begins, Bitcoin is holding below this level and is now below its 21-day moving average (at $29,054).
From a technical perspective, this means that the possibility of a new downtrend connecting the late March/early April highs is very likely and would come into play at the $28,000 area.
Should Bitcoin fall below this level, it is highly likely to test support at the $26,500 area, its 50-day moving average, and a support-turned-resistance zone from mid-March onward. .
A return to key long-term support-turned-resistance in the $25,200-400 area is also possible.
THE bulls will they take advantage of the decline?
Although uncertainty remains as to the number of times the Federal Reserve The US will raise interest rates and when it starts cutting them, one thing seems certain: the end of the Fed’s tightening cycle seems near as US inflation and economic growth slow.
This implies that macroeconomic conditions will not be a major headwind in crypto markets in 2023, as they were in 2022.
That, combined with continued crypto adoption, legislative progress (the EU just passed a landmark crypto bill), and a long list of indicators (on-chain, technical and signal) signaling that last year’s lows marked the end of the bear market, confirms that the bull market should continue in 2023.
As such, expect traders and investors eagerly watching major Bitcoin price declines to take action, just as they did in mid-March.
A return to $25,000 could mark a real opportunity for longer-term bulls and would mark a decline of nearly 20% from previous monthly highs above $31,000.
It remains to be seen whether Bitcoin can rebound above $30,000 in the next ten days, as Bloomberg’s price pattern analysis suggests.
Nonetheless, the longer-term outlook remains strong.
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