Bitcoin Price Analysis: Wait and See Where Recent Signs of Strength Lead

This week realized a big gain as bitcoin enjoyed a 25% rally from its local bottom before topping out around $4,400. Support currently appears to be established in the mid-$3,000s as the market remains indecisive over its next move:

Figure 1: BTC-USD, Daily Candles, Current Support Level

Figure 1 shows the relevance of the current support level as it represents a previous support level that was never properly retested during last year’s parabolic bull market. At the moment, we are currently seeing some resistance around the macro, 78% Fibonacci retracement of the parabolic run-up. To date, bitcoin has realized a whopping 82% devaluation from its all-time high to the current low in the mid $3,500s.

If our current support holds, we should expect to see a battle over the 78% retracement values where, if the overhanging retracement level breaks, we will likely encounter another level of resistance in the $5,000 region. But, for now, the market needs to tackle the 78% Fibonacci before…