Bitcoin (BTC) has managed to jump back above $30,000 after falling sharply in the last few weeks. There is hope the mega-cap coin is finally back on an upward trajectory. However, technical analysis does not support this and in fact, the surge could be a dead cat bounce. Here are some highlights:
Bitcoin is struggling to keep the momentum going above the $30,000
The coin will need to advance above $30,800 before any decisive run
It is likely BTC will fail to reclaim the $30,800 and fall sharply thereafter
Data Source: TradingView
Why Bitcoin will fall below $30,000
The $30,000 price is psychologically important for Bitcoin. In fact, when the coin fell below it, there were fears that it could unravel to $20,000. But Bitcoin has recovered and has finally regained $30,000.
Although this could be the start of a prolonged recovery, there is still a long way for BTC to go. Based on technical analysis, the coin will need to regain the $30,800 support. So far, it’s struggling to hit the mark. We don’t think BTC has enough bullish momentum to reach that price.
Also, the rally this week could be driven by short-term dip buyers. It is likely that they may start cashing in once they realize the upside above $30,000 is limited. Eventually, BTC will likely drop in the short term and could retrace losses towards $26,000 before another leg up.
Are Whales accumulating Bitcoin?
Interestingly, most big wallets are invested in Bitcoin for the long term. In fact, large wallets have added more Bitcoin during the may dip.
For this reason, BTC is likely to remain relatively stable in the short term. The coin could still find its ATH this year but we will have to wait and see if sentiment improves.