Bitcoin to $30,000 still out of reach, but getting there ‘looks likely’

by James · April 7, 2023

(Bloomberg) — Bitcoin’s 2023 rally has put it on the verge of breaching $30,000 for the first time since June — but it’s proving a tough level to crack. Seasonal trends can help give it a boost.

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The largest cryptocurrency traded around $28,100 as of 1:00 PM in New York – roughly within 15% of a key trend line, the average price over the past 30 days. The coin has been hovering near the resistance area since March, having surged 72% in the first three months of the year to end its best quarter in two years.

Despite the double-digit rally, Bitcoin has not even recovered half of its value since the record high of nearly $69,000 in November 2021. While the $29,000 to $30,000 zone served as support several times in the past when Bitcoin traded above this level, the range is now working as an upside barrier. The resistance pattern – known in technical analysis as a “spinning-top” candlestick pattern – represents indecision, or a stalemate between bulls and bears.

Several narratives helped fuel Bitcoin’s rise in the first quarter — including how Bitcoin is meant to act as an inflation hedge and how the coin will bypass vulnerabilities found in traditional banking systems. Basically, however, little has changed in the world of digital assets. Add to this the fact that the crypto market’s liquidity and trading volume have dried up as investors who had waded in during the pandemic remained on the sidelines following 2022’s scandals and implosions, including that of FTX in November.

“After an impressive rally in March, we are now seeing a period of consolidation just below the key $30,000. Bulls are taking a breather before the next attack on this key resistance, said Fiona Cincotta, senior financial market analyst at City Index. Still, she said, a break above $30,000 still “looks likely.”

Perhaps seasonality will play a hand. April has typically been a solid period for Bitcoin, ranking as the second best month behind October, according to data compiled by Bespoke Investment Group. Over the past five years, Bitcoin has posted an average gain of 15.63% in April, Bespoke data shows. For Ethereum, the second largest digital asset, April has been the strongest month back to 2018, with an average gain of 33%.

In some ways, Bitcoin may be a victim of its own success. After recent sharp moves one way or another in the token, such as the March spurt, Bitcoin has tended to trade in a range for some time, said Matt Maley, market strategist at Miller Tabak + Co.

“When it makes that move, investors get nervous about the move and then the crypto falls into sideways territory for a while,” Maley said. – This is the sixth time this has happened in the past year.