Will Bitcoin Price Plunge Again?
The price of Bitcoin (BTC) has rebounded more than 12.50%, surpassing $64,000 on May 4, just three days after hitting a two-month low of around $56,550.
This resurgence has been largely fueled by the US Federal Reserve’s promise to keep interest rates unchanged throughout 2024. Additionally, positive US employment data showing unemployment claims falling to their lowest level since mid-February further supported Bitcoin’s continued price recovery.
Is Bitcoin likely to continue its upward trend, or are we expecting another downtrend?
Potential to retest $60,000 support
In terms of price chart technicals, it is likely that Bitcoin will undergo some correction in May.
As of May 4, BTC is eyeing a decisive close above the 50-day exponential moving average (50-day EMA, red wave in the chart below) at around $63,966. That could lead the price towards the 0.786 Fibonacci retracement (near the upper trendline resistance) near $69,650.
The cryptocurrency broke through the 50-day EMA on May 4, but struggled to maintain momentum for a further breakout and faced resistance near the 0.5 Fibonacci retracement level at around $64,895.
If Bitcoin fails to decisively overcome this resistance, a period of consolidation or reversal could begin. In this case, the next downside target appears to be around the multi-month uptrend support (purple line) at around $60,500 in May.
Meanwhile, a further breakdown of the uptrend line support risks falling BTC price towards the 0.0 Fibonacci retracement level near $56,580 in May.
Interestingly, analyst CrediBULL Crypto expect If the price reverses from the $62,000-64,450 resistance area, it will fall towards similar levels.
Bitcoin NUPL suggests cautious bullish sentiment
As of May 4, the Bitcoin Net Unrealized Profit/Loss (NUPL) indicator has reached 0.54. This indicates that a significant portion of BTC holders are experiencing significant unrealized profits.
Typically, NUPL values exceeding 0.5 indicate confident market sentiment, potentially paving the way for further price increases. However, it is important to note that NUPL is down from its 2024 high of 0.68 established in March.
A decline in NUPL is often seen as a signal of declining euphoria, usually preceding or coinciding with a price correction. As a result of this on-chain signal, the Bitcoin price may see a downward trend in the coming months.
Bitcoin Will Reach $85,000-100,000 Next: Analyst
A section of the Bitcoin market remains optimistic about the possibility of a prolonged BTC bull run in the coming months. This includes independent market analyst SHIB Knight, who expects the BTC price to reach $85,000 due to a dominant bullish flag setup.
Another analyst, Steph, is Crypto. gift Citing a breakout of the so-called Relative Strength Index (RSI), a six-digit Bitcoin price target was proposed.
Related: Bitcoin enters ‘new era’ as whale secures over 47,000 BTC amid price drop
Notably, as of May 4, Bitcoin’s daily RSI reading has surpassed descending trendline resistance, similar to the breakouts in January 2024 and October 2023. This RSI breakout was preceded by a strong rally in March 2024, with BTC rising towards $75,000.
“Bitcoin daily RSI just showed a new buy signal,” Steph added from Crypto.
“This could be the start of a rally toward $100,000.”
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.
