Chart of The Week - XBT/USD – BITCOIN holds around $40000 level, could bounce back?

XBT/USD – BITCOIN holds around the $40000 level, could bounce back?

• Resistance Zone: $51000 to $52000
• Key Resistance: $44700
• Major Pivot Point: $40250
• Key Support Level: $37500
• Support Zone: $34300 to $33300
• Last Analysis Date: Blue Vertical Line
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• CBOE VIX – Volatility Index @ 24.26 -0.11 (-0.4%)

Trade Insights – XBT/USD Pair – Chart shows viable long positions above the Pivot point at $40250, with the first target of the Key Resistance level at $44700 and then the test of Resistance zone at $51000 to $52000 (tradingview).

Alternatively, Short positions below the Pivot Point of $40250 to first test the Key Support level at $37500. Then with any further weakness target the Support Zone between $34300 to $33300.

Chart Analysis:

Directional bias: 2 Weeks - XBT/USD

XBT/USD chart shows that Bitcoin has completed one full cycle of Expansion and Contraction after our last analysis. The last time chart indicated an Inflection point at $37500 from where the Bitcoin started to rise. And it peaked at about $48000 falling short of the $50000 mark. And it has now dropped back to the Pivot at $40250. It seems the pair is consolidating as of now. And this could extend to a few days to a couple of weeks before we see any further advancement in the prices. If the prices are to fall, then the prices would have to first hit the Key Support Level at $37500 and consolidate here for some sessions before dropping lower to the Support Zone at $34300 to $33300.

If we look at the Chart again the Bitcoin prices have now set up three equal highs and one higher high. On the other hand, the BTC has managed to create 4 higher lows since January. Any lower low at this stage could indicate and confirm the Bearish outlook. Otherwise, if the price managed to stay above this current higher low then we might see the beginning of another cycle of expansion.

The RSI Indicator shows that the prices are now down to just under 40 points apparently oversold and now consolidating.  The pair has now dropped below the 50-day SMA red line and the 200-day SMA green line. The ascending channel that started from January 2022 lows shows that the current. The prices are just trading near the lower limit of the channel at about $39800. And the Bitcoins have apparent support here which could lead to the start of a rally here.

Fundamental Overview:

Bitcoin has stood strong above the $40000 level in the face of a CPI report showing that inflation accelerated to 8.5% in March a fresh four Decade high. Cryptocurrency is 13-year-old now and some investors think it is a good hedge against inflation, but it has been noticed that the price action in the cryptos is increasingly correlated with the US Stocks. Most institutional investors got into Crypto at the start of 2021 between the $30000 to $40000 range and they could buy the dip if they still believe in the Longer-term outlook of the Digital currency.

Click to see Market Insights this week: Market Insight - Inflation At Its Peak?