Bitcoin’s key level as retrace looms

by James · April 3, 2023

Bitcoin (BTC) remains in consolidation mode, trading within a fully formed range between $27,500 and $28,000. While the cryptocurrency has failed to break through its toughest wall of resistance, it has found solid support at the $27,000 level.

While the $27,000 support level has given bullish traders hope for another attempt to reach the $30,000 mark, the potential for a pullback remains to find bullish momentum and strength to break the higher high resistance.

A question of time before Bitcoin sweeps the lower levels?

Bitcoin could face a potential pullback and test support levels at $27,000, the previously achieved support at $25,200, or even lower. However, there is still a bullish scenario for the cryptocurrency despite these short-term fluctuations.

The $25,000 support region is aligned with the 50-day moving average (MA). This provides a significant threshold to prevent further decline and could serve as a return point for Bitcoin to reach new highs.

On the other hand, cryptanalyst Justin Bennett mean that Bitcoin will eventually retest the $20,000 price level, regardless of whether it makes another push toward $30,000 in the near term. Bennett suggests that it is simply the nature of Bitcoin, which is known for its high volatility.

Bitcoin liquidity heatmap. Source: Justin Bennett on Twitter.

The chart above shows that there is currently considerable liquidity available below the $20,000 mark, particularly within the $18,000 to $19,500 range. While this liquidity could fuel Bitcoin if it returns to these levels, it poses a potential risk to the cryptocurrency.

BTC at a critical moment

According to crypto analysis firm Material Indicator, Bitcoin’s current price range is marked by a “ladder” of ask liquidity, dropping from $29,000 to $30,000 to the active trading range. This suggests significant selling pressure at the higher end of the range, preventing Bitcoin from breaking above the $30,000 resistance level.

On the other hand, Material Indicators have identified new bids emerging around the $27,600 level, indicating support to maintain the current range and make another attempt to reach $30,000. This suggests that there is still bullish sentiment in the market , despite the current price movements tied to the area.

New bids on Bitcoin’s current price. Source: Material indicators on Twitter.

According to the analyst team at Material Indicators, Bitcoin has made three failed attempts to surpass the higher high resistance level. However, despite these attempts, there has not been a confirmed breakout or breakdown from the current price range. The price has been rejected at various points, which has resulted in choppy price movements within the area.

Overall, the appearance of new bids at this level indicates that some investors are willing to buy Bitcoin at this price, which could help provide support and potentially drive the price higher, confirming the new trend of Bitcoin and further confidence in BTC.