Bitcoin Facing Crucial Test After Resistance Breach

Reading Time: 2 minutes
  • Bitcoin has crossed the crucial $46,000 level at the sixth time of asking this year
  • All eyes are on whether it can sustain above $46,000 on a retest
  • The market has been lacking serious green candles for over three months

Bitcoin has breached a crucial resistance level which could set the stage for the next rally. With several signs pointing towards an uptick over recent weeks, Bitcoin put in a month-ending push over $46,000 that, if it holds, will likely see a further move to the $50,000 level and beyond.

Bitcoin Looks to Have Bottomed Out

Bitcoin looks to have bottomed out around the $33,000 level, putting in another higher high in the process, and last night burst through the crucial $46,00 barrier that had been holding it back on every occasion this year:

bitcoin 1

Of equal importance is what Bitcoin does next. Assuming that last night’s rally has now burnt itself out, the question becomes where Bitcoin goes once the selling starts. In order to be sure that a new rally has truly started it needs to hold above the level it has just passed and turn it into support, which would set up run to the $52,000 area:

bitcoin 2

This bullish ethos is echoed by an alternative viewpoint of Bitcoin’s price action:

bitcoin 3

As we can see, price has been accumulating nicely in the first quarter of this year, with the sharp upward tick rapidly approaching the equivalent of August 2021 when it ran from $30,000 to $69,000.

On-chain metrics have been pointing towards a new cycle for the past few weeks, with alt performances also backing up the suggestion that the mid-cycle correction was just that rather than being a bear market. A hold above $46,000 from here would usher in a very welcome spring bounce that will bring months of green to markets that have been absent of serious gains for over three months.