Bitcoin Outlook: It Could Be Now or Never for a BTC Bounce

I fully understand how this call for a bounce could irk many bears. The trend is clearly lower, the outlook for crypto is murky, and there are genuine concerns that we could be headed towards World War III. While all of this may be true, bitcoin has so far held above $60k despite the negativity.

If a bearish market cannot break support amid bad news, it becomes vulnerable to a bounce should sentiment improve. In fact, we may not even need good news — merely a scaling back of the bad news for a bounce to unfold.

Bitcoin Bounce Risk Builds as $60k Support Holds

Source: LSEG

Furthermore, bitcoin has just suffered a five-month decline — its most bearish run since 2018. While this does not exactly scream “buy”, it is another factor to consider when assessing whether the market may be oversold, at least in the near term.

Seasonality also adds an interesting layer. While bitcoin has generated a slight negative median return over the past 12 years, it has closed higher in four of the past six Marchs. Average gains during positive March months have been 18.8%, compared with an average loss of -13.3% during negative months, despite March closing lower 54.5% of the time.

These are not predictions — merely observations of historical behaviour. But with prices still holding above $60k despite the negativity surrounding crypto, a countertrend bounce could remain on the cards so long as support continues to hold.

Source: LSEG

Bitcoin (BTC/USD) Technical Analysis: Bitcoin vs US Dollar

$60k Support Holds as Oversold Signals Hint at Bounce Risk

The weekly chart shows strong bearish momentum overall, with the gap below 80,000 highlighting an acceleration of the downtrend. Such gaps are sometimes referred to as “measuring gaps”, as they tend to appear around the midpoint of a move. If that interpretation proves accurate, bitcoin could theoretically fall as low as 30,000.

For now, my core bias remains for a move down to at least 50,000, near the 47,150 high-volume node (HVN). However, there are also clues that a bounce may be in the making on this timeframe.

The spike lower four weeks ago respected 60,000 support. While prices have drifted lower since then, weekly volatility has remained subdued and bears have failed to drive price back to the wick’s low. This suggests the possibility that accumulation is taking place.

Momentum is also attempting to turn higher this week despite the plethora of risk-off headlines — a sign of resilience from bitcoin bulls given the geopolitical backdrop. It is also worth noting that the weekly RSI (2) and RSI (14) both reached oversold territory at last week’s close.

Source: CME, TradingView

$70k Resistance Key as Bulls Attempt to Build Momentum

70,000 is a clear line in the sand for bitcoin traders over the near term. While it continues to cap prices as resistance, we have now seen two bullish range-expansion candles, both forming higher lows relative to the 60,000 spike low. To me, this suggests bullish pressure is quietly building, which fits with the idea that accumulation may be taking place.

Tuesday’s hanging man candle warns of near-term downside risks, but my preference is to seek dips within yesterday’s range so long as prices remain above Tuesday’s low near 65,000.

A break above 70,000 could trigger a quick follow-through higher, given the significance of the level and the likelihood that bearish stops may be triggered. The 20-day EMA is currently capping prices as resistance, and a break above it brings the 50-day EMA into focus near the 80,000 level.

Should bulls be treated to a bullish breakout, I will also be watching for evidence of a swing high at or below 80,000 in anticipation of the next leg lower. A break below 60,000 would instead bring the 50,000 handle into focus.

Source: CME, TradingView

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge