Bitcoin hints that "darkest night of 'cryptowinter' is over"
By Noemi Jansana / Alejandra Zamora
Date: Thursday 02 Jun 2022
(Sharecast News) - Bitcoin´s price flirted with the $32,000 level over the past few days, in what was a bull run for the queen of cryptocurrencies that helped it catch up with the stock market 'rally'. The fact that the coupling with equity markets has finally worked again "has given traders hope that the dark night of the 'cryptowinter' may be over," commented Naeem Aslam, head of analysis at Avatrade. However, "it is quite possible that this is nothing more than a 'dead cat bounce' unless the price respects the recent low formed by Bitcoin´s price," he added.
Technical analysis has made it clear for now that this behavior meets the pattern of a bullish rally in a bear market. Just as the one experienced by the stock markets, which finished in the red on Wednesday. Bitcoin also appears to be limp on Thursday, although markets could stretch gains a bit further as Wednesday's highs for the queen of cryptocurrencies came back knocking on the door at $32,000, according to data from CoinMarketCap.
Independent analyst Pentoshi, stated in a social media post. "Bear market rallies can be brutal. They can go much higher than you might think, but they almost always end at a declining high or the same. Don't be fooled by emotions," he warned.
While the market is watching for signs of strength, cryptocurrency analyst Michael van de Poppe stated that a break above $31,100 opens the way to test resistance at $32,800. That would put Bitcoin at price levels last seen in early May, when a falling market saw Bitcoin plummet from highs near $40,000 to lows of $26,600.
In terms of technical price levels, the first resistance to overcome is at $35,000, but "the next major resistance for Bitcoin´s price is at $34,779, as that is where the 50-day simple moving average is located on the daily time frame. If we see the price break above this price level, we could see a continuation of the current trend," up to $40,000, Aslam added.
"To confirm the start of a rebound we should wait for a close above $32,825," indicated César Nuez, analyst at Bolsamanía.
A recent report by 'Bloomberg' also pointed out that Bitcoin's recovery could be just an oasis before another major fall. Therefore, this should not be confused with a sustained reversal. If Bitcoin fails to hold its key support levels, it has every chance of falling back to the $22,000 levels, noted Bloomberg Intelligence's, Jamie Douglas Coutts.
"If it can hold the psychologically important $30,000 level, it could trade in range up to $40,000 resistance. Technically, a break below $29,000 would confirm an ominous double-top pattern with the next support at the May low of $25,424, and then the 200-week moving average at $22,130," he added.
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