Bitcoin (BTC/USD) technical setup in play

BITCOIN (BTC/USD) PRICE, CHEMICAL AND ANALYSIS:

Brief on Breakout and Retest of Triangle Pattern

BITCOIN OUTLOOK

Bitcoin’s recent rally found resistance around the $28500 mark with consolidation the theme since. The rally was fueled in part by a weaker dollar, as well as an increase in both liquidity and volatility appears to have run out.

As the fallout from the banking crisis continued to rattle markets, BTCUSD hit a 9-month high as market participants might have looked to bitcoin and cryptocurrency as an alternative to cash storage. This would come as something of a surprise given last year’s public failure of FTX as well as the ongoing scrutiny of the crypto industry, particularly in the US. However, hard wallet crypto storage has a sense of appeal and mitigates such risks in these somewhat uncertain times, and crypto prices seem to be benefiting.

JPMorgan bank said that the US banking crisis has opened up opportunities to increase market share for those exchanges that offer banking services. Whether the adoption will be smooth and fast remains to be seen given some of the public scandals in 2022 and increased regulatory scrutiny. Nasdaq has also announced its plans to launch cryptocurrency storage services by the end of Q2 2023. Whether this development will support crypto and bitcoin prices in the coming months remains to be debated.

Breaking news just a while ago regarding Binance, the world’s largest crypto exchange, and its CEO Changpeng Zhao being sued by the US CFTC for allegedly violating trading and derivatives rules. This could further weigh on prices as more information is released on the matter supporting the narrative of lower prices in BTCUSD.

TECHNICAL OUTLOOK

From a technical perspective, Bitcoin has been in a state of consolidation for the better part of 10 days since breaking above the $28,000 mark. On the 4H chart below, we can see the triangle pattern in play with a break and candle close below the triangle likely opening for a retest of the 100-day and 200-day MAs resting at $26,000 and $24,400 respectively. Given that we are currently breaking out with some momentum, a retest of the triangle breakout may be smarter and provide a better risk-to-reward opportunity for potential shorts.

Changes in risk sentiment may play a role in any potential move and may be something to keep an eye on. The turmoil in the banking sector remains far from over while geopolitical risks have reared their head over the weekend and could drive BTCUSD higher if they escalate.

BTC/USD Four-Hour Chart – March 27, 2023

Source: TradingView

Written by: Zain Vawda, Marketing Writer for DailyFX.com

Contact and follow Zain on Twitter: @zvawda