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Analysis

Chart of the day – an imminent potential bottom reversal for bitcoin

bitcoin image on a laptop computer screen

Cryptocurency markets sharply retreated from March highs due to a sell-off in risk assets, amid surging US bond yields and a strengthening US dollar.

Some positive news surfaced over the weekend that Grayscale Investments CEO Michael Sonnenshein sees a possible launch of a bitcoin ETF, with the US Securities and Exchange Commission approving an application for the Teucrium Bitcoin Futures ETF earlier this month.

From the technical perspective, bitcoin may encounter a near-term rebounding opportunity with a double bottom pattern.

Bitcoin - Daily

There's a potential rebounding at the lower band of the ascending channel.

(click to see the enlarged chart)

Key technical elements:

  • The four hourly chart forms a potential double bottom pattern, suggesting an imminent rebounding opportunity with an intraday resistance at 41,578, which is the Fibonacci retracement at 23.60% (connecting from the high on the 11 November to the low on the 24 January)
  • The ascending channel is intact in the daily chart, with potential support at the lower band, overlapping with the support in the 4 hourly chart.
  • Both RSI and Stochastic point up, with Stochastic falling into the overbought territory, indicating a near-term bearish momentum fades off.

Key price levels:
Supports: 38,347
Resistances: 41,578, 44,000, 47,400


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