Bitcoin price prediction: After a brief period of consolidation around $44,000, Bitcoin price struggled to clear a key resistance level and failed to reach $45,000. This led to a sharp price drop at the start of the week, indicating a bearish trend to open the week. Nevertheless, technical analysis suggests that the current decline could be a retest, suggesting a possible recovery. The crucial question now is whether Bitcoin will end the year above $45,000 or fall below $40,000. Let's explore this further.
Also Read: Top Reasons Why You Should Buy Bitcoin (BTC) and Shiba Inu (SHIB) in December
Is BTC rising to $50,000?
- The pullback retests the broken resistance trendline of a previous rising channel.
- The daily chart shows the possible formation of a bullish morning star pattern
- Bitcoin's intraday trading volume is $23.5 billion, a loss of 23%.
With a continued uptrend in 2023, Bitcoin price action maintains a bullish approach, with a higher low formation leading to a rising, expanding channel breakout. After several rallies, the breakout rally reached the $44,000 level, leading to a market-wide rally.
However, the upward momentum slowly fades into a sideways movement and eventually leads to a trend reversal. With a double top reversal in a shorter time, Bitcoin enters a deficit phase to retest the broken levels.
With a long tail formation, the daily candle retests the $40,000 mark and recovers back to the $42,000 level. Currently trading at $42,000, Bitcoin represents a successful retest if the price stays above $4,000.
Therefore, a rebound after retesting above the trend line in the coming days would be a compelling signal of a strong comeback. In such a case, buyers can potentially increase the price by 15% to around $50,000.
Important levels to watch
During the recent two-month rally, Bitcoin experienced several corrections, which typically served as a recovery phase to regain bullish momentum for further advances. Interestingly, these pullbacks often found reliable support at either the 23.6% or 50% Fibonacci retracement levels. The current correction above the critical 50% Fibonacci level suggests that the long-term uptrend is intact. This positioning above a key support level suggests strong potential for recovery and reinforces the overall optimistic outlook for BTC's future performance.
- Bollinger Band: A reversal from the upper boundary of the Bollinger Band indicator reflects sellers controlling the short-term trend.
- Moving Average Convergence Divergence: The increase in selling pressure is evident as the MACD and signal lines are preparing for a negative crossover.
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