Bitcoin’s Future Outlook Following Return to $60,000 this Week
Bitcoin faced a significant test as it dipped below $60,000 for the first time since May 3, prompting a cautious market sentiment. By Tuesday afternoon, the cryptocurrency had climbed back above $61,000, marking a 17% decrease from its March peak of $73,797.68, as reported by Coin Metrics. Chart analysts observed a lack of buy signals, hinting at a potential further decline that could be more impactful at current levels. Ari Wald, an analyst at Oppenheimer, highlighted the ongoing moderation since March, indicating that trading might face pressure below the $66,000 resistance, which aligns with the cryptocurrency’s 50-day moving average. Wald pointed out the critical support levels at $57,500, corresponding to the 200-day average, and down to $56,500, the low point in May, emphasizing that breaching these levels could have detrimental effects.
Bitcoin has been range-bound between $60,000 and $70,000 since mid-March, struggling due to a lack of immediate catalysts, reduced demand for bitcoin exchange-traded funds, and increased selling pressure from miners. Should Bitcoin fail to maintain the $57,000 level, Wald suggested that the next significant downside level would be around $49,000. David Keller, the chief market strategist at StockCharts.com, echoed similar sentiments, identifying potential downside levels around $58,000, with further possible declines to the $50,000-$52,000 range. Keller noted that historically, buyers tend to intervene around the $60,000 mark, and the cryptocurrency often finds support at round number price levels.
Tom Fitzpatrick from R.J. O’Brien pointed out major support for Bitcoin at $56,527, highlighting a potential double top neckline formation, which typically indicates a bearish trend. Fitzpatrick warned that breaching this level could trigger a significant 22% to 29% drop in the cryptocurrency’s value. Despite these warnings, Wald remained optimistic about the current support at $57,500 and the 200-day moving average, suggesting that as long as the neckline of the double top pattern remains unbroken, the rising trend could persist. Additionally, Wald noted that the bullish activity in the NASDAQ-100 index signals positive risk tolerance in the market.
Bitcoin’s performance in the past month reflects a nearly 10% decline, with a brief touch of $71,000 at the beginning of June followed by a steady downward trend. The cryptocurrency market remains sensitive to various factors, and investors are closely monitoring key support and resistance levels to gauge its future trajectory.
