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Here’s the outlook for bitcoin as the cryptocurrency struggles to reclaim the all-important $30,000 technical level

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  • The price of bitcoin is testing a pivotal level that could determine whether strength or weakness is ahead.
  • The cryptocurrency needs to decisively clear $30,000 to test its $35,200 resistance level, according to Fairlead Strategies.
  • If bitcoin can’t reclaim $30,000, a downturn back to $25,200 appears likely.

Bitcoin’s year-to-date rally of 76% has catapulted the cryptocurrency to a pivotal technical level that should give investors clues as to whether more upside or downside is ahead.

Fairlead Strategies founder Katie Stockton is closely monitoring the “psychological” $30,000 level to determine if the strength in bitcoin can continue, according to a recent note. 

If bitcoin can decisively clear that threshold, Stockton expects the cryptocurrency to trend toward its key resistance level at $35,900, representing potential upside of 24%.

“The recent breakout and positive weekly MACD support a bullish intermediate-term bias,” she said, referring to the moving average convergence/divergence indicator.

But a recent loss of short-term momentum means if bitcoin fails to hold its rising 50-day moving average at $27,509, the popular cryptocurrency is likely to trend toward its technical support level of about $25,200, representing potential downside of 13%.

Bitcoin traded up about 2% to $29,041 on Thursday, with recent banking turmoil in US banks helping boost prices.

Stockton, according to the note, sees the likelihood of bitcoin trading lower towards support rather than higher towards resistance.

“Short-term oversold conditions should generate a brief pause before bitcoin resumes lower toward key support… the weekly stochastics have a downturn, which, if confirmed at the end of the week would support a more prolonged pullback,” she said.

While Stockton is bearish on bitcoin in the short term and bullish on bitcoin in the intermediate term, she remains neutral on the cryptocurrency for the long term, proving just how mixed the technical outlook for bitcoin is.

“We are long-term neutral despite improved intermediate-term momentum given the additional hurdle from the monthly cloud… the cloud is now a headwind, acting as long-term resistance,” Stockton said.

Stockton’s “cloud” model refers to a technical indicator called the Ichimoku Cloud, which helps traders identify support and resistance levels based on prior price action.

Read the original article on Business Insider

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