After a several months-long rally, Bitcoin dipped 13%. Bitcoin hit $31,000 in the middle of April, making a lot of investors think that the bull market is back. But is it?
Bitcoin dives below $30,000
It’s very important to notice, that Bitcoin formed a bearish engulfing pattern on the weekly timeframe. This may send the digital gold downward, suggesting a retest of the nearest support at $25,315.
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The OsMA indicator is also at the support, so it could serve as a great entry zone for bulls if the buy signal is confirmed. Indeed, the falling lines in the OsMA indicator suggest that divergence could be formed in the next couple of weeks, possibly sending Bitcoin back up again.
Bitcoin weekly chart, author’s analysis, source: tradingview.com
The uptrend ended around the psychological level of $30,000, which sent Bitcoin back to the 50-day moving average. For investors waiting to buy, it is probably better to wait for Bitcoin to at least reach the support $25,315.
BTC already had a 100% bull run since November, so it is logical to expect a little pause in the rally. Bitcoin reaching the support would mean a pullback of approximately 20%, an ideal buy opportunity for investors who dollar-cost average.
Bitcoin daily chart, author’s analysis, source: tradingview.com
The 4-hour chart hints a new lower low could be formed soon along with green lines in the OsMA indicator. The support may be reached in the next few days, putting bulls back in reality.
Is the uptrend over?
Although the rally is not necessarily over, Bitcoin is very likely to continue to move downward in the near future. Whether the uptrend that started this year will continue or not depends on how well will BTC manage the support. If an aggressive pullback occurs, Bitcoin might be on track to reach $35,000 or even $40,000.
Bitcoin 4h chart, author’s analysis, source: tradingview.com
While Bitcoin is on a good track to continue higher, the Bitcoin halving takes place in about a year. Until then, several selloffs and fluctuations may occur. However, the worst should be behind us, meaning FTX fall, bank collapses, and other similar events.