Bitcoin Price Forecast: Key Levels to Watch for Potential Reversal

Bitcoin completed a 38.2% Fibonacci retracement yesterday with the day’s low of 60,771. That low also bounced off an internal rising trendline. So, this means the uptrend may continue from here if Bitcoin doesn’t fall below 60,771.

50-Day Moving Averages is After the 20-Day

Moreover, let’s consider the moving averages. The 20-Day MA was busted during the retracement and the area around the 20-Day line has acted as resistance since it fell back below the line on March 19. This means that further downside may be coming. Once one moving average line if busted, the next in the series becomes a target. The 50-Day MA is down at 57,177. If reached it would put Bitcoin below the internal trendline as well.

Correction Follows 87.5% Rally

Given that this correction follows a relatively rapid 87.5% rally, it would not be surprising to see Bitcoin fall a little further before the correction is over. The 50% retracement is at 56,168 and a second trendline also identifies potential support around the 50% level. Remember, last week’s candle showed indecision and a possible top. On Tuesday a weekly reversal triggered when gold dropped below last week’s low of 64,505. Below the 50% retracement is the 61.8% Fibonacci retracement at 5,998. Notice that the second internal rising trendline will have been busted by then, leaving the full trendline that rises from the October lows.

Monthly Chart Currently in Weak Position

The monthly chart is starting to show signs of concern for the bulls. Bitcoin is currently trading below the halfway point for the month’s range, which is at 66,538 currently. Since we are getting close to the end of the month, this means that it may end the month in a weak position on the monthly chart. Certainly, it becomes more likely if we see a deeper retracement.

That would indicate a likely longer retracement and or consolidation period before Bitcoin is ready to trend higher again. However, that scenario may change on a daily close above 68,934. A daily close above 68.934 before new retracement lows, indicates strength and increases the chance that the 38.2% retracement may complete the correction.

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