Bitcoin experienced a significant drop in price, reaching its lowest point in two months at around $56,550. However, just three days later, it made a remarkable recovery, surging over 12.5% and surpassing $64,000 on May 4th. This sudden resurgence can be attributed to the US Federal Reserve’s commitment to keeping interest rates unchanged until 2024.
On May 4th, Bitcoin closed at approximately $63,966, comfortably above its 50-day exponential moving average (50-day EMA). This positioning indicates that the price may continue to rise towards the upper trend line resistance near $69,650, which is located at the 0.786 Fibonacci retracement line.
Despite surpassing the 50-day EMA, Bitcoin faced difficulties in maintaining its momentum for further breakouts. It encountered resistance near the 0.5 Fibonacci retracement level at around $64,895. If Bitcoin fails to overcome this resistance decisively, it could enter a consolidation phase or even experience a reversal. In such a scenario, the next downward target would be around $60,500, near the multi-month rising trend line support (purple line).
In the event of a breakdown of the rising trend line support, there is a possibility that Bitcoin’s price could drop to the 0.0 Fibonacci retracement level at around $56,580 in May. Interestingly, analyst CrediBULL Crypto predicts a similar level of decline if the price retreats from the resistance area between $62,000 and $64,450.
Looking ahead, some members of the Bitcoin market remain optimistic about the potential for a prolonged bull run in the coming months. Independent market analyst SHIB Knight predicts that Bitcoin could reach $85,000 due to a prevailing bull flag setup.
Another analyst, Steph is Crypto, has set a six-figure price target for Bitcoin by referring to a breakout in the relative strength index (RSI). As of May 4th, Bitcoin’s daily RSI reading was above a declining trend line resistance, similar to previous breakouts in January 2024 and October 2023. These RSI breakouts were followed by strong bull runs, including a rise to $75,000 in March 2024.
It is important to note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
