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Bitcoin Price Forecast: Testing Resistance Levels after Bounce from Support

By:
Bruce Powers
Published: Apr 23, 2024, 20:25 GMT+00:00

Bitcoin's recent bullish momentum faces resistance challenges, with potential downside targets if resistance continues to block the ascent.

Following last Friday’s low of 59,573 the price of Bitcoin has been improving as it advances to test resistance levels. For the past two days it has been testing resistance around the 20-Day MA, 50-Day MA, and trendline. The 50-Day line is the most significant as the 20-Day MA has been breached slightly on each of the past two days. Also, last week’s high of 66,929 was exceeded this week as Bitcoin advanced to a high of 67,273.

A graph of stock market Description automatically generated with medium confidence

Upside Resistance Zone a Concern

A daily close above last week’s high will confirm an upside weekly breakout. However, Bitcoin would be heading up into a patch of potential resistance that takes the form of a symmetrical triangle. Whether it can maintain strength and advance through that consolidation zone without a deeper retracement first remains to be seen. Certainly, price behavior following a drop below the 50-Day MA on April 13 has been bearish but unconvincing as downside follow through has been muted.

Typical Short-term Bearish Behavior

The retracement found support around the 38.2% Fibonacci level last week. A bounce followed to test the 50-Day MA as resistance. So far, it has acted as resistance. This is typical bearish behavior in a declining trend. Support represented by the 50-Day line is broken to the downside and subsequently tested as resistance before the bearish trend takes hold. It is at resistance of the 50-Day line now. Therefore, a drop below Sunday’s low of 64,250 will provide a bearish signal. That low price would also put Bitcoin below the blue 8-Day MA, which is currently at 64,505 and represents support for the past several days.

Deeper Retracement Would Target 56,168

If last week’s low of 59,573 is busted to the downside, then Bitcoin is likely heading to the next lower target zone at the 50% retracement of 56,168 (B). That price level is strengthened by the completion of a small falling ABCD pattern near the same price. The CD leg of the pattern is extended by 127.2% of the AB leg to arrive at a target of 56,159. Further down is the 61.8% Fibonacci retracement at 51,999, that also lines up with the small wedge pattern from mid-February.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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