Bitcoin (BTC) Poised for Potential Breakout: Market Analysis and Insights
Amid the Trump tariffs and the recent quite negative US inflation figures release, Bitcoin is coiling up ready for a breakout of the current descending wedge. Could this be a breakout back to the highs, or will the breakout be to the downside?
Current negative crypto sentiment, but tailwinds are building
While the traditional stock market appears to have borne recent bad economic news remarkably well, Bitcoin has reacted rather nervously, and a long series of lower highs and lower lows has continued to play out.
The U.S. Spot Bitcoin ETFs have seen net outflows over the last few days. On Thursday there was a $156.8 million outflow, while on Wednesday, the net outflow was to the tune of $251 million. In the grand scheme of things these are not big outflows, especially when one compares them to the huge net inflows that preceded them. But it does rather reinforce the overall negative sentiment that currently permeates the crypto market.
On the positive side of things, the tailwinds for Bitcoin and crypto are continuing to build. The climate couldn't be rosier for all things crypto, at least as far as the US government is concerned. Both regulatory arms of government, in the SEC (Paul Atkins) and the CFTC (Brian Quintenz) will be chaired by individuals who understand, and are well disposed to crypto.
$BTC approaches pivotal moment
Source: TradingView
The 4-hour chart for $BTC shows that a pivotal moment is likely to be arrived at soon. The price is up against the top of the descending wedge, and will either break through or be rejected once again.
If the price does break through, and can hold and confirm above the trendline, we may see the beginning of a climb back towards the highs. On the other hand, if the price is rejected, and the $96,000 horizontal support doesnt hold, $BTC could go back to the bottom of the ascending wedge, and possibly break though this and head down to the bottom of the range at $92,000.
Will a crossover of the 100 SMA above the 50 SMA be avoided?
Source: TradingView
The simple moving averages on the daily time frame have a story to tell. It can be seen that when the $BTC price was in the long 8-month bull flag, all three moving averages were intermingled, and it wasnt until the price broke out of the top of the bull flag that the 50, 100, and 200 SMAs sorted themselves out and separated, with the 50 SMA (blue) on top, and the 100 SMA (green) and 200 SMA (red) in order below.
If the $BTC price continues this sideways movement, the 50 SMA and the 100 SMA could cross, an event that the bulls would not like to see. However, if the price breaks out from here, this cross would likely be avoided.
The 200 SMA would generally be held above in a bull market, and would potentially provide strong support should a big correction take place. The 200 SMA is currently at $80,000, and with the top of the last bull market coming in at $70,000, it would be extremely unlikely for the price to come back to this level.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Text source: Crypto Daily™
