Bitcoin’s stalling momentum at the $52,000 resistance could signal an “imminent pullback” as 33% rise in a few weeks is “unsustainable”, Swissblock said.
The uptrend could still continue, with 10x Research setting a $57,500 price target for the next leg higher.
Bitcoin (BTC) rose above $52,000 this week for the first time in 26 months, but its stalling momentum may foreshadow an “imminent” pullback before higher prices, Swissblock analysts said in a Friday market update.
The largest crypto by market cap rallied 10% in a week, outperforming the broad-market CoinDesk20 Index’s (CD20) 8% advance, extending its relentless rise from $38,500 in late January. The surge was coupled with accelerating inflows into U.S. spot bitcoin exchange-traded funds (ETF), with BlackRock’s IBIT raking in over 28,000 bitcoin this week.
However, the $52,000 area is a significant resistance level on long-term charts that capped prices in September and December in 2021, Swissblock noted, and now also posed a meaningful barrier for the rally to continue now.
“A pullback seems imminent and necessary given the recent rapid ascent of approximately 33% over the past few weeks, suggesting an unsustainable rally,” Swissblock analysts wrote.
Beyond a short-term dip, the market looks poised for higher prices, the report added, and any forthcoming correction could be a buying opportunity as long as BTC holds its support at near $47,500. “At this point, any pullback should be thought of as a potential buying opportunity,” the report said.
Institutional crypto exchange FalconX also noted “exceptional” trading volumes that support the early 2024 uptrend, last seen during the 2023 March regional banking crisis.
“Price increases followed by lower volumes have historically been a reliable indicator of false breakouts in crypto,” FalconX analysts wrote Friday. “The good news at this point is that liquidity conditions surrounding the January rally remain generally robust.”
10x Research analyst Markus Thielen said in a Friday update that bitcoin could run towards a $57,500 price target, citing strong liquidity and increasing demand for bitcoin futures.
“Bitcoin appears to target 57,000 as its next resistance, and considering BTC’s performance in the previous pre-halvings, the odds for another leg being higher are increasing,” Thielen wrote.
