Bitcoin is preparing for a breakout, charts indicate
CRYPTO TREYSI
As the world’s leading cryptocurrency, bitcoin (BTC), weathers a storm of indecision, market participants eagerly watch for signs of an impending breakout.
In the second week of March, BTC reached a 90-day high of $29,159 and has been trading sideways ever since. Despite the continuous push from bears, it has held its ground, trading at $28,321 as of April 10.
Let’s delve into the current state of BTC and explore whether it’s on the brink of a breakthrough.
BTC monthly chart | Source: CoinMarketCap
Blast from the past: April 2019 deja vu
The current indecision in bitcoin is reminiscent of April 2019, when a similar three-week indecision occurred after a significant green candle.
#Bitcoin Third Week of Indecision 😩This is somewhat reminiscent of April 2019 – same 3 weeks of indecision after a big green candle and then boom 🚀But I’m not rushing into longs here. pic.twitter.com/V8ygWlRJKm
— CryptoBullet (@CryptoBullet1) April 10, 2023
Back then, BTC had just begun to recover from a bear market, and its price had surged from around $4,000 to over $5,000 in a few days.
Market participants were unsure of the next move as the bulls and bears struggled to gain control.
BTC price chart between April and June 2019 | Source: CoinMarketCap
Eventually, the bulls prevailed. Bitcoin’s price embarked on an impressive rally that saw it reaching nearly $14,000 by June 2019.
As history seems to repeat itself, watch closely to see if the current market indecision will resolve similarly.
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EMA tightness: a sign of upcoming volatility
A recent analysis of bitcoin’s exponential moving averages (EMAs) on the 4-hour chart shows that they have been tighter than before.
#Bitcoin Price Update. 1. The EMAs have been the tightest on the 4 Hours than in the recent Past.2. Volatility is natural to be expected here and it will be on the Upside if the FED doesn't announce anything too Stupid this week.3. Just need to eat the Market sales at 29K pic.twitter.com/V3TvLFfj8J
— Emperor👑 (@EmperorBTC) April 10, 2023
As EMAs from diverse timeframes begin to converge and tighten around a specific price point, the asset’s price has been restrained within a narrow range for an extended period.
This pent-up pressure within the limited boundaries ultimately leads to a breakout or heightened volatility, as the market can no longer sustain the constricted price movement.
Hence, the recent EMA-tightness signals that a breakout is expected and could be on the upside if the Federal Reserve does not announce anything unfavorable this week.
Closing gaps and exiting the range: a pivotal moment for bitcoin?
The current market dynamics hint at a potential shift in BTC’s trajectory, with two crucial factors playing a role: the filling of price gaps and the prospect of leaving its trading range.
Price gaps at $20,000 and $28,000 have been closed, drawing attention to the next critical level — the $35,000 gap. Achieving this milestone could signal a breakout and heighten investor enthusiasm.
Both 20k and 28k gaps filled.35k is waiting.$BTC pic.twitter.com/CgxC1sZyZK
— Inmortal (@inmortalcrypto) April 10, 2023
Meanwhile, BTC has been trapped within a limited-price corridor for weeks, with bulls and bears at a stalemate.
One analyst believes that bitcoin is on the cusp of exiting its range, marking a decisive move that could determine its direction in the coming months.
The combination of these factors creates an atmosphere ripe for potential market movement.
#BTC Daily: We are leaving the range this week and there isn’t anything anybody is going to do about it pic.twitter.com/AogxYLg4Xm
— “Coosh” Alemzadeh (@AlemzadehC) April 10, 2023
Are the bears losing ground?
The directional movement index (DMI) shows that bears are getting weaker and weaker with each bitcoin weekly close. This could signal a potential shift in the market, giving way to a bullish trend.
Bears are getting weaker and weaker with each #Bitcoin weekly close, according to the Directional Movement Index.🐻☠️ pic.twitter.com/f8oLRuZPfI
— Tony "The Bull" (@tonythebullBTC) April 10, 2023
Moreover, despite multiple rejections, one analyst anticipates that many individuals have set their short-stop losses above $29,200.
#BTC – Despite multiple rejections, I anticipate that many individuals have set their short stop losses above 29.2k.Therefore, I believe these stop losses will be triggered prior to any downward movement. Whether the market trend is red or green, I anticipate a further upward… pic.twitter.com/wR2omtmE5b
— Andrew | MrTastyCalls (@MrTastycalls) April 10, 2023
He believes these stop losses will be triggered before any downward movement, leading to a further upward movement toward the highs.
Bitcoin price: what to await
In conclusion, the current state of BTC is filled with indecision and anticipation. However, multiple factors suggest that a breakout might be imminent.
With tightening EMAs, filled gaps, weakening bears, and potential short-stop loss triggers, investors should keep a close eye on the market.
Whether the breakout is bullish or bearish, one thing is certain: the crypto giant has seemingly woken up and is bound to make some noise.
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