Bitcoin is currently exhibiting a bullish trend, with a recent price of $84,555 after a 23% decline from January’s peak. Despite this drop, historical data and strong fundamentals suggest a potential recovery. A decreasing supply of Bitcoin on exchanges, rising mining difficulty, and positive technical indicators support this outlook. Analysts also note a correlation with gold prices, which may further influence Bitcoin’s performance.
Bitcoin continues to maintain a bullish trend, despite experiencing a 23% decline from its peak in January. As of Good Friday, the cryptocurrency was trading at $84,555, reflecting a 13% recovery from its lowest point this year, which results in a market valuation exceeding $1.68 trillion. Notably, Bitcoin has only fallen by 10% throughout the year, outperforming the Nasdaq 100 Index, which has dropped by 13%.
Historical data indicates that even with this 23% dip, Bitcoin remains in a long-term bullish trend. In previous instances, the coin has experienced significant downturns, such as a 35% plunge from its March 2021 peak to its August 2021 low. Following those downturns, Bitcoin successfully recovered, setting a precedent for its potential resilience.
Moreover, Bitcoin has seen deeper corrections historically. For instance, it fell from $68,980 in November 2021 to a low in 2022, largely influenced by rising interest rates and the collapse of major crypto firms like Celsius, Terra, and FTX. While the current market pullback might persist, strong fundamentals suggest a potential recovery for Bitcoin.
A key indicator of Bitcoin’s strength is the increasing mining difficulty, which has resulted in fewer new coins entering circulation. Additionally, the supply on exchanges has decreased significantly, with only 2.18 million Bitcoins currently available, down from 2.44 million in September last year, indicating a reluctance among holders to sell.
Another potential driver for Bitcoin’s price movement can be observed in the recent gold market surge, which has risen over 25% this year to all-time highs. Analysts suggest that Bitcoin often follows gold with a delay of 100 to 150 days.
Technical analysis of Bitcoin reveals that, despite recent price corrections, it remains within an upward trend. It has consistently found support at the 50-week Exponential Moving Average and has stayed above the Ichimoku Cloud indicator. Moreover, Bitcoin recently surpassed $73,685, marking the upper boundary of a cup-and-handle pattern, which is traditionally a bullish continuation signal.
This cup had a depth of 78%, implying potential gains up to $123,585, approximately 45% above the current trading level. However, a significant decline below the $73,685 support level would negate this bullish outlook and raise concerns about future price movements.
