After months of rallying and predominantly trading in the green zone, Bitcoin (BTC) faces a new sobering reality, with the maiden cryptocurrency poised to close April with losses.
These losses come after the asset enjoyed a seven-month streak of bullish price movements, highlighted by key events such as the approval of the first US spot Bitcoin exchange-traded fund (ETF) and the halving.
Reviewing the asset’s price, crypto trading expert TradingShot suggested in a TradingView post on April 30 that the one-month decline should not cause alarm. Notably, amid the price drop, Bitcoin has struggled to maintain its valuation above $60,000, with concerns that a slip below this level could result in further losses.
The expert noted that Bitcoin has historically experienced a brief decline within its bull cycles, with single red monthly candles being a common occurrence.
“Only once we’ve had 3 straight red months during a Bull Cycle and that was on September 2019 but it was when Bitcoin was correcting the abnormal very early rise following the Libra euphoria,” the expert noted.
The impact of halving
The analysis pointed out that after each of Bitcoin’s halving events, the cryptocurrency has seen single red candles five times and double red candles twice. This pattern suggests that short-term corrections are expected, especially as Bitcoin gears up for its final surge.
Looking ahead, there is optimism for a rebound in the coming months. The analyst suggested that June will likely return to green territory, potentially kicking off another streak of positive monthly performances.
“If June is red too, we should then experience at least 4 straight green months as it happened on December 2016. In any case it appears that buying now on this red monthly closing is as good of a level as any as BTC prepares for the final parabolic rally of the Cycle,” the analyst said.
In addition to the monthly candlestick analysis, attention is drawn to the one-month Relative Strength Index (RSI), which has recently dipped below the 70 barrier after reaching highly overbought levels in March.
This pullback is likened to previous RSI corrections observed in September 2020, March 2017, and October 2012, further reinforcing the notion that Bitcoin’s parabolic rally may be imminent.
With Bitcoin striving to establish stability above the $60,000 support zone, some analysts contend that other critical levels could facilitate a rebound. According to a report by Finbold, maintaining a price above the $61,900 support threshold could propel Bitcoin towards the $70,000 mark.
However, the current price trajectory has been influenced by various factors, including the slowdown in Bitcoin ETF inflows and uncertainties surrounding the Federal Reserve’s monetary policy amid persistent inflation concerns. Additionally, Bitcoin’s response to the rollout of a spot ETF in Hong Kong has been tepid.
Bitcoin price analysis
At the time of reporting, Bitcoin was valued at $61,255, marking a correction of approximately 1.6% over the past 24 hours. Over the past week, the cryptocurrency experienced a downturn of nearly 9%.
Interestingly, technical indicators signal bullish sentiment as Bitcoin seeks a potential upturn in May. According to one-month gauges sourced from TradingView, a summary reflects a ‘buy’ sentiment at 12, with moving averages indicating a ‘strong buy’ at 11, while oscillators suggest a ‘sell’ stance at 7.
Although technical indicators for the upcoming month appear optimistic, Bitcoin must overcome its current challenges and maintain a price above $60,000 to sustain any chance of positive momentum.
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