Bitcoin technical analysis: bulls aim for a glimmer of recovery
Bitcoin was showing conflicting signals as of May 13, 2024, over a range of time frames and technical indicators, creating a challenging environment for traders. The price of the most valuable cryptocurrency asset is currently $62,792, up slightly from $60,776 to $63,156 over the course of a day.
Bitcoin is still down 3.6% for the week despite a recent 2% increase, illustrating the inherent volatility and unpredictability of the market today.
The daily chart of BTC/USD indicates a bearishly oriented phase of consolidation. Following a peak close to $71,287 on April 10, the price of bitcoin declined to a possible low of $56,500.
The most recent rebound doesn't seem to have much volume to support it, which could mean there isn't much support to the upside. This situation points to a possible weakness wherein a lack of purchasing demand can cause further falls until additional buyers intervene.
The 4-hour chart provides information about attempts by Bitcoin to rebound in the near future. Notably, the price tested the barrier at $63,876 after rising from a low of $60,176. There have been recent attempts to raise $62,000 in support.
Growing purchasing interest is indicated by increased volume during bullish rallies, which, if sustained, could underpin additional upward advances.
The positive trend of Bitcoin is more evident on the hourly chart, where price swings range from $60,600 to above $63,200. Alongside these rises, there appears to be substantial purchasing activity, which could result in more price appreciation in the near future, as indicated by the increasing volume.
Important oscillators, such as the Stochastic at 58 and the Relative Strength Index (RSI) at 49, now have neutral readings, meaning there are no signs of an imminent overbought or oversold situation.
There is a strong basis for possible price increase in the near future given the bullish indications on short-term charts, such as the 1-hour and 4-hour frames, together with favourable moving averages and rising volume.
Further bullish momentum may be generated if Bitcoin is able to maintain support levels above $62,000 and overcome the resistance at $63,876, respectively.
The strong downward trend on the daily chart, together with conflicting indications from oscillators and long-term moving averages, caution against overly optimistic thinking despite the recent spike in purchasing interest on shorter time frames.
The potential for a failed rebound and the absence of volume support on significant bull days imply that Bitcoin may restart its larger downward trend.