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Bitcoin: Dip-Buying Levels to Watch as Crypto Attempts Bounce From Key $65K Area

Published 22/03/2024, 11:38
BTC/USD
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  • Amid the volatility in crypto markets, Bitcoin spent the week testing key support levels and reacting to macroeconomic data.

  • This came after high US inflation in February triggered a sell-off in assets like cryptocurrencies, adding to Bitcoin's correction from the previous week.

  • Despite facing resistance at $68,000, Bitcoin's technical outlook remains bullish, with critical support levels around $65,000 signaling the potential for further upside.

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  • After starting a correction last week, Bitcoin spent this week testing crucial support levels.

    Although the crypto market dynamics remain unchanged, Bitcoin has continued to react to macroeconomic data since last week.

    The high US inflation in February, following January's trend, made investors uneasy, leading to a sell-off in risky assets like cryptocurrencies.

    Bitcoin: Technical View

    Despite losing $68,000 the previous week and experiencing profit-taking, Bitcoin managed to stay above the ascending trend line established in 2024, which acted as the primary support.

    As the sell-off intensified on Tuesday, Bitcoin retraced toward the trendline, which was tested and confirmed twice as a support in the first quarter of the year. This prompted buying near these levels.Bitcoin Price Chart

    The mid-week uptick was largely driven by the Fed's stance on high inflation, which had kept the market on edge. While it was widely expected that the Fed would maintain interest rates, there was speculation about potential rate cuts later in the year.

    Fortunately, the Fed's dovish statements eased concerns, prompting Bitcoin to bounce back and hold onto its upward trend line. However, the rally faced resistance at $68,000, leading to a pullback to around $65,000.

    Despite some volatility mid-week, $65,000 has proven to be a crucial support level since March 16. This zone is backed by the 21-day EMA and the Fib 0.236 level relative to the recent uptrend. A weekly close above $65,000 could signal further upside potential for the following week.

    In such a scenario, the $68,000 resistance level would come into focus again. A breakthrough above this level could pave the way for Bitcoin to target the $73,000 region, aligning with the midline of the channel.

    A breach of $73,000 could propel BTC towards the $80,000 area. Additionally, a move above $68,000 would likely see the Stochastic RSI on the daily chart exit the oversold zone, adding momentum to the bullish momentum.

    On the downside, if Bitcoin slips below $65,000, attention will shift to the $63,000 level, coinciding with the trend line.

    Bitcoin's bullish outlook remains intact as long as it stays within the daily chart's upward channel. However, a breach of the channel could bring $60,000 into focus as the next support level.

    A daily close below the rising trend line corresponding to the lower channel line could see Bitcoin dip to $60,000, potentially leading to consolidation in the $60,000-$65,000 range.

    Conversely, a breakout could prolong the correction and expose Bitcoin to the $51,000-$53,000 range.

    In summary, Bitcoin's ability to stay within the rising channel, particularly above $63,000, is crucial for its continued upward trajectory.

    A breach of $63,000 would shift attention to $60,000 as the last line of defense against further selling pressure. Maintaining this second support level could lead to sideways movement instead of a rapid decline.

    ***

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    Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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