The fall in Bitcoin last week was stopped by the level of $ 48,000 per coin. Today’s daily candle has already shown strong momentum and convincing bullish engulfing.
Thus, a reversal signal has been generated. But for how long? Given the available data, it is difficult to give an unambiguous answer to this question.
Fundamentally, the collapse of the main cryptocurrency was exacerbated by reports of tax hikes by US President Joe Biden. And this factor has not disappeared yet. It is assumed that in the end the rate may be approved slightly lower than the declared 39.6%. But can we say that the news is completely processed by the market? It’s hard to say, everything will depend on how this situation will continue.
For example, Peter Brandt, who is considered the legend of the old school of traders, said on Twitter that Biden’s decisions during his presidential term could be extremely negative for Bitcoin.
Brandt notes that in some states taxes may be raised to 55%, while the current capital gains rate is 20%. This means that a large volume of bitcoins will come to the market to pay the tax.
But in Peter Brandt’s portfolio, Bitcoin holds the largest share among other cryptocurrencies. And despite the potential negative tax decisions, he says he still belongs to the crypto camp. And he asks his opinion not to be considered a forecast about the fall of the main cryptocurrency.
In the face of fundamental uncertainty, let’s return to technical analysis. But what if the recent fall was not a breakdown of an uptrend, but an extension of it? We have at least two consecutive lows of February 28 and April 26. If you draw a trend line along them, and the channel line – at the maximum between them (peak from April 13), then the historical maximum also falls well on this resistance level.
It is difficult to say whether this is really so, since we can speak of a full-fledged trend after the third rebound from the support line. But with two minimums and a maximum between them, the prerequisites for it already exist. If the broad ascending channel 43033.38 – 47017.82 – 61759.10 from February 28 turns out to be true, then BTCUSD may continue strengthening towards $ 67,000 per coin.
Now let’s see locally. Bitcoin has now risen above $ 50,000 per coin, which is a good signal. If now the price breaks through the local resistance 53980.47 (blue dotted line) and consolidates above it, the next target can be considered the level 57513.35 (next blue dotted line). These are the nearest price targets. After updating them, more conclusions can be drawn.