Bitcoin experienced a significant drop in price, reaching its lowest point in two months at around $56,550. However, just three days later, it made a remarkable recovery, surging over 12.5% and surpassing $64,000 on May 4th. This sudden resurgence can be attributed to the US Federal Reserve’s announcement to maintain interest rates unchanged until 2024.
On May 4th, Bitcoin closed at approximately $63,966, above its 50-day exponential moving average (50-day EMA). This positioning suggests that the price could potentially move towards the upper trend line resistance at around $69,650, which is located at the 0.786 Fibonacci retracement line.
Despite surpassing the 50-day EMA, Bitcoin faced challenges in maintaining momentum for further breakouts. It encountered resistance near the 0.5 Fibonacci retracement level, around $64,895. If Bitcoin fails to overcome this resistance, it could enter a consolidation or even a reversal period. In such a case, the next downward target would be around $60,500, near the multi-month rising trend line support.
In the event of a breakdown of the rising trend line support, Bitcoin’s price could potentially drop to the 0.0 Fibonacci retracement level, around $56,580 in May. Interestingly, analyst CrediBULL Crypto predicts a similar level of decline if the price retreats from the resistance area between $62,000 and $64,450.
Looking ahead, some members of the Bitcoin market remain optimistic about the possibility of a prolonged bull run in the coming months. Independent market analyst SHIB Knight predicts that Bitcoin’s price could reach $85,000 due to a prevailing bull flag setup.
Another analyst, Steph is Crypto, has set a six-figure price target for Bitcoin by referencing a breakout in the relative strength index (RSI). As of May 4th, Bitcoin’s daily RSI reading was above a declining trend line resistance, similar to breakouts that occurred in January 2024 and October 2023. These previous RSI breakouts preceded a strong bull run, including a rise to $75,000 in March 2024.
It is important to note that the information provided in this article should not be considered as investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own thorough research.
