As the cryptocurrency market regains momentum, recent developments in Bitcoin (BTC) indicate a potential local peak. Three key technical signals reveal that the leading crypto is hitting a significant resistance level, paving the way for a short-term correction.
For several weeks, Bitcoin had been steadily climbing, driven by a generally bullish sentiment in the markets. However, since this weekend, this momentum seems to be waning as the price tests a well-defined resistance — a technical limit structured by both a historical trend channel and significant volumes traded at this level.
For investors and traders, understanding these technical resistances is essential to anticipate trend reversals, especially in such a volatile market as cryptocurrencies.
Technical analysis of Bitcoin reveals three major factors shaping a short-term reversal dynamic:
If the $91,600 support breaks with sufficient volume, the scenario of a correction down to $86,000 becomes plausible. This would correspond to a natural retracement after a swift rise, leaving little technical support below.
In essence, the market could trigger a wave of stop-loss liquidations, initiating a deeper corrective move.
According to Zoral, a drop below $86,000 would instead indicate a new low in the following weeks.
Another indicator pointing towards a retracement is the daily RSI struggling to breach the 70 threshold. As Tony The Bull demonstrates on X, when the RSI fails to surpass this level, it often leads to a strong correction or a bear market:
“Bitcoin’s daily RSI has not exceeded 70, a key element for a bullish impulse. This latest failure at 70 resulted in the sharpest decline of the last bear market. In fact, the entire 2022 bear market stayed below 70.”
Nevertheless, BTC shows a bullish RSI divergence and is expected to bounce in its demand zone between $71,000 and $73,000.
Here are the key levels to monitor for BTC this week:
As long as Bitcoin remains below the upper channel zone, the probability of a correction remains high. Bulls will need to regain control quickly to avoid a scenario of prolonged consolidation.
Conversely, as long as BTC stays in the green zone on the graph above, hopes for a new high are still alive.
For analysts and institutional investors, this setup calls for special attention. Risk management becomes crucial: adjusting stops, taking partial profits, or implementing hedging positions through BTC options can be strategically relevant.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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