Bitcoin may need to pull back before rallying to $30,000
- Bitcoin recently lost bullish momentum, trading in the $26,750 – $28,730 range, with $28,000 as critical resistance
- A potential pullback could lead to a retreat towards the $27,250-$27,500 support and a sharp correction towards $25,000
- Fed’s rate hike puts pressure on banks, and escalating banking crisis could help boost rally to $30,000
Bitcoin has lost bullish momentum after regaining the 2023 trendline with last week’s bounce. In the past week, BTC prices reflected increasing volatility.
Among the technical indicators we’ve followed based on Bitcoin’s February-March pullback, the $26,750 – $28,730 range has been crucial in recent weeks. These are Fibonacci expansion levels.
Lately, BTC has been trading in this range. Since last week, the $26,700 level has acted as support. And it has made weak attempts to break the $28,700 level. Meanwhile, $27,500 (fib 1,414) continues to act as a short-term pivot level.
h2 Bitcoin’s resistance critical at $28,000/t2
Meanwhile, BTC continues to attempt to break above the $28,000 level and the failure to capture this region is starting to stress the BTC market.
Next week we may see increased selling pressure if the $28,700 level is not breached in the weekend trade.
The current trend for Bitcoin continues to be suppressed after breaking into the $27,000 band. If the purchase rate declines, this pressure can turn into a sharp correction. The first support zone for a potential pullback is the $27,250-$27,500 area. This support is at the 8-day exponential moving average (EMA) of $27,500, which is the pivot level.
BTC could quickly pull back towards the $25,000 area on a potential breakout. The $25,000 area was a major resistance zone in February, along with the 21-day EMA.
Finally, based on the short-term price action, the $22,800 – $23,000 area will be a key support zone for Bitcoin.
For Bitcoin’s uptrend to be triggered technically, it is important to break $28,700, which I have highlighted for some time, on volume or weekly close. BTC could rise to $34,000 on high volume if this breach occurs.
This week’s announcement was the most critical Fed decision in months. And the message about the banking crisis that began in the US and spread to Europe at the FOMC meeting was extremely important.
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The expectation that the Fed would raise interest rates by 25 basis points was already priced in before the decision.
However, after Powell’s speech at the press conference, Bitcoin pulled back a bit. The Fed reaffirmed its commitment to its inflation target and put pressure on banks by continuing to raise interest rates.
h2 Continued banking crisis may help support Bitcoin/t2
On the other hand, Powell said they have enough tools to support the banks. He signaled that the Fed may take steps to expand the bank’s balance sheet if necessary while implementing tight monetary policy.
Currently, the price is defending the $26,000 support level amid mixed reactions in the Bitcoin market. The banking sector is again on the agenda.
Today, shares in Deutsche Bank (ETR:DBKGn) fell by more than 10%, which was interpreted as a further escalation of the crisis in the banking sector.
As at the beginning of the process, all these developments can further increase the demand for Bitcoin-based cryptoassets.
With renewed buying interest at the weekly close above $28,700, we may see Bitcoin rally towards the $30,000 band next week. However, failure to break through resistance will trigger a correction to $25,000.
Dissemination: The author does not own any of the securities mentioned.
Written by:
Günay Caymaz/Investing.com
