Bitcoin Price Risks Dip Following Rejection at $89K Resistance Level

Bitcoin faces a potential 10-15% price dip after hitting a resistance of $89,000 due to rejection at the 200-day moving average. Key traders cite overbought conditions and price reversals as indicators of potential corrections. However, some analysts suggest positive macroeconomic factors are driving a bullish sentiment, forecasting a sustainable rally nearing $75,000.

Bitcoin’s price faces potential risks of a 10-15% dip following a significant rejection near the $89,000 level. Traders are observing a price reversal after classic resistance impeded upward momentum. Data indicates that Bitcoin (BTCUSD) has cooled after reaching an April peak of $88,874, contrasting with the bullish performance of gold during the same period.

Initially, Bitcoin had shown promising strength, creating expectations of a parallel surge alongside gold, which achieved several all-time highs on April 22. However, BTC experienced resistance at the pivotal 200-day simple moving average (SMA). Trader Daan Crypto Trades highlighted this scenario, noting that while Bitcoin broke through the daily 200 exponential moving average (EMA), it faced a steep rejection at the classic SMA level.

Historically, the 200-day SMA acts as a supportive structure during bullish phases, but it was compromised in March, coinciding with increased selling pressures amid geopolitical tensions. Since that juncture, BTC has touched five-month lows beneath $75,000, prompting some market analysts to question the sustainability of the latest price ascent.

Trader Roman referred to the stochastic relative strength index (RSI) indicating “overbought” conditions, citing past instances where similar RSI levels resulted in 10-15% corrections. He suggested that such a retreat would be consistent with the prevailing downward trend of the S&P 500. On April 22, the daily stochastic RSI was positioned at the upper limit of its range.

Contrarily, other market analysts maintain optimism, linking Bitcoin’s potential price growth to various macroeconomic influences. Factors such as declining strength of the US dollar, record highs in the global M2 money supply, and a delayed response to gold’s performance may provide catalysts for BTC’s ascent. Trader Cas Abbe expressed confidence in a bullish trend, dismissing the likelihood of a “bull trap.” He highlighted significant whale accumulation and a rebound in the Coinbase premium, predicting $74K-$75K as a solid bottom for Bitcoin, advocating for a sustained upward trajectory in altcoins as well.

This article does not provide investment advice or endorsements. Readers are advised to conduct thorough research before any trading or investment actions.