Bitcoin barely holds $28K as bulls see new rejection at key resistance
2023.04.06 08:03
Bitcoin (BTC) saw another failure to exit a tight trading range into April 6 as $28,000 again hung in the balance.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Analysis sees traders “compressing” BTC price
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD trading below the the $28,000 mark at the time of writing.
The pair had approached $29,000 the day prior, eating into ask liquidity in what analysis called a “choreographed” move by whales.
That appeared to be true, as upward momentum soon faded and spot price remained in an increasingly narrow range.
The cloud of liquidity around $30,000 thus remained untested, much to the frustration of those hoping for an easy continuation of the 2023 upside.
In follow-up commentary, monitoring resource Material Indicators noted that traders had moved bid and ask liquidity toward each other, “compressing” the likely zone of movement for the spot price.
“Liquidity dampens volatility,” it summarized.
Liquidity dampens volatility. #FireCharts shows both sides seem to be moving #BTC liquidity closer to the active trading zone, effectively compressing the range. Gaps that don’t get filled in or defended with buy/sell walls are prone to be exploited…and yes, that means both… pic.twitter.com/3ZDrfJeaVh
— Material Indicators (@MI_Algos) April 5, 2023
Related: Crypto winter can take a toll on hodlers’ mental health
Considering what the result of current price action might be on short timeframes, analytics resource Skew devised two outcomes.
It described BTC/USD as “crabbing” — moving sideways — with little room for maneuver.
$BTC 4H
Not much changed, still crabbing in tight 4H rangePrice struggling to sustain above 1D range high; usually implies one of two outcomes:
1. Grind with EMA trend (compression before expansion) / hold 4H range low
2. bleed towards 1D range low & breakdown occurs there. pic.twitter.com/rJ2dEE14O0
— Skew Δ (@52kskew) April 6, 2023
“Double top” concerns remain
Zooming out, meanwhile, trader and analyst Rekt Capital eyed a trip to $27,000 as a potential signal that a long-term “double top” formation is underway.
Related: Bitcoin copying ‘familiar’ price trend in 2023, two more metrics show
“Recent BTC rejection from Double Top resistance means BTC could still drop from here to complete the second part of the formation,” he tweeted on the day alongside an explanatory chart.
“Generally, Double Tops resemble an “M” shape and so the second part of the pattern would form with a drop to ~$27K (blue).”
BTC/USD annotated chart. Source: Rekt Capital/ Twitter
Others remained overall optimistic about Bitcoin’s path for the coming year.
After such a strong start, trader and analyst Credible Crypto doubled down on his prediction that BTC/USD would set a new all-time high in 2023.
“A dip to 23-25k which I have been talking about for weeks doesn’t change any of that. It is nothing to be concerned about,“ part of a recent commentary stated.
Earlier, Cointelegraph reported on calculations calling for another bullish double top for Bitcoin in 2025, this potentially peaking above $200,000.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
