Bitcoin is once again dominating the financial world’s focus. Speculation and technical analysis indicate that means it can go to the moon all the way up to $114,000! This very ambitious target is a bet on Bitcoin’s strength. To maintain the bullish trajectory, it has to firmly overcome the key resistance zone at $95,870, a level that’s proven difficult to reclaim. BlockchainShock.com explores some of the technical aspects involved in greater detail. It provides them with deeper, more actionable insights that empower them to make better trades in this highly volatile market.

Eleanor Brooks, lead fellow at the blockchain-focused GovLab, says it’s crucial to know what the technical indicators are under the hood. Her detailed, analytical, and thorough approach allows both savvy accredited investors and blockchain enthusiasts to lead the charge in the rapidly accelerating world of blockchain and digital assets. Brooks’ analysis goes beyond the hype to provide a trustworthy, rigorously vetted source of cryptocurrency insights.

Technical Indicators and Bitcoin's Ascent

A number of technical indicators are flashing bullish on Bitcoin right now, giving enough of a basis for the $114k target. Yet as optimistic as bulls may want to be, traders need to be careful and expect the trend to sometimes reverse direction. Here’s a breakdown of the key indicators:

  • Relative Strength Index (RSI): An RSI reading above 70 typically suggests that Bitcoin is overbought, which could lead to a price correction. However, in a strong uptrend, a sustained RSI above 70 could indicate continued bullish momentum and a potential break through resistance.
  • Awesome Oscillator (AO): The Awesome Oscillator measures market momentum. A rising AO above zero indicates sustained momentum, confirming the continuation of an uptrend and suggesting a potential break through resistance.
  • Moving Averages (MAs): Moving Averages smooth out price data to identify trends. A short-term MA crossing above a long-term MA, known as a Golden Cross, is a bullish signal that could indicate a strong uptrend and potential break through resistance.
  • On-Balance Volume (OBV): OBV measures buying and selling pressure. Increasing OBV suggests that buying pressure is building, which could lead to a potential break through resistance.
  • Stochastic Oscillator: This indicator compares a security's closing price to its price range over a given period. A move above 80, followed by a decline, could signal a potential sell. However, a sustained move above 80 could indicate a strong uptrend and potential break through resistance.

As it stands today, Bitcoin’s 111-day moving average (111DMA) is $91,300. Trade above this level, historically, has been a consistently reliable key indicator that we’re in a bullish trading phase. In addition, the short-term holder (STH) cost basis at $93,200 is another key level to keep an eye on. Keeping this measure above this trend line has been the defining factor between bull and bear markets. As of April 29, 91% of Bitcoin’s circulating supply was in profit. This is a higher support level than what was observed at the April correction, a sign of tremendous bullishness in the market.

The cost-basis ribbon model is equally informative. Investors who have maintained Bitcoin beyond a month are now profiting. Such a change would indicate an eventual reduction in volatility, driven by capitulation from investors.

Navigating the $95,870 Resistance: Bullish vs. Bearish Scenarios

Bitcoin is currently testing key resistance levels in the $93,000–$95,000 range, successfully breaking its downtrend and forming a higher high. This is an encouraging development for the bulls. Though in order to take the bullish trajectory seriously, we need a clear resolution above $95,870 to gauge a breakout.

Bullish Perspective

  • Bitcoin's price has increased by 27% since its April 7 lows, breaking from several diagonal resistance levels.
  • The first bullish objective is located at around $98,000, and even in the bullish scenario, a local top of around $98,000 is likely before the price breaks down.
  • The fifth and final wave will take the Bitcoin price to a new all-time high, potentially reaching $114,000.
  • Technical analysis shows a strong buy signal, and according to the 1-week rating, BTC shows a buy signal.

If Bitcoin manages to overcome the $95,870 resistance, the next target would be $98,000, and then potentially a surge to $114,000. Technical analysis has entered the strong buy zone right now, adding bullish confirmation to the bullish setup.

Bearish Perspective

  • The bearish analysis suggests Bitcoin is nearing the end of an A-B-C corrective structure that started on April 7.
  • Despite being in a bearish pattern, the RSI and MACD have generated hidden bullish divergences, creating confusion about the trend’s direction.
  • The daily time frame analysis gives an uncertain Bitcoin price prediction, failing to confirm if a breakout will occur.
  • Bitcoin has traded in what resembles an ascending wedge in the past two weeks, which could lead to a correction.

A bearish analysis suggests that Bitcoin is near completing its A-B-C corrective structure. This most recent pattern began on April 7. The daily time frame analysis is indecisive, unable to confirm that a breakout is imminent. The Bitcoin Price has traded in what looks like an ascending wedge the last few weeks, a pattern pointing to a potential correction.

Actionable Insights for Traders

Here are some strategies for traders to consider:

  1. Risk Management:

    • Risk only a small percentage of capital per trade: A common rule is to risk only a small percentage (e.g., 1-2%) of your capital per trade.
    • Diversification: Putting all your funds into one cryptocurrency exposes you to excessive risk. Consider diversifying your portfolio across multiple assets.
    • Use of technical indicators: Indicators like RSI and MACD can help identify potential entry and exit points. RSI estimates the speed of value changes to distinguish overbought or oversold conditions, and MACD shows the relationship between two moving averages.
    • Setting clear risk management plans: Each strategy has its pros and cons, but the common thread is the need for a clear, well-researched plan.
    • Avoid emotional trading: Emotions can be a trader’s worst enemy, and having a clear plan can help avoid emotional trading.

  2. External Economic Factors:

    • The US dollar exchange rate significantly negatively impacts bitcoin returns.
    • Treasury yields have a positive effect on bitcoin returns.

Keep yourself up to date and employ good risk management practices. By following these strategies and steering clear of emotional trading, you can approach the fluctuations of the Bitcoin market with more confidence. BlockchainShock.com is dedicated to equipping you with the knowledge and expertise to navigate this fast-evolving terrain with confidence.