Technical overview – Bitcoin’s Surge Faces Critical Test at $65,500 Resistance Level
Bitcoin’s Recent Performance: Bitcoin has seen a notable rebound this week, climbing 11% from the previous week’s low of $56,700. Since the beginning of May, the cryptocurrency has appreciated nearly 5%, contributing to a 50% increase since the start of the year.
Technical Indicators: Despite recent gains, Bitcoin’s price activity remains bearish on the daily timeframe as it continues to trade below the key 45-day EMA channel. The recent dip below the crucial $60,000 support level raised concerns about a potential extended correction, however the buying interest above $56,000 suggests strong underlying support.
Key Resistance: The formation of a new resistance at $65,500 is currently maintaining bearish momentum, aligning with the upper boundary of the 45-day EMA channel. Surpassing this threshold would be a pivotal development, potentially signaling a resumption of the long-term uptrend. Conversely, failure to overcome this barrier can result in the continuation of the sideways consolidation.
Overbought Conditions Ease: On higher timeframes, such as weekly and monthly, momentum indicators have normalized following extended periods in overbought conditions. This suggests that the ongoing consolidation phase may be approaching its end.
Upcoming US Inflation Data: The U.S. economic calendar features critical inflation data that could significantly impact market dynamics. The Producer Price Index (PPI) is set for release on Tuesday, followed by the Consumer Price Index (CPI) on Thursday. Given the current economic landscape, these inflation figures are likely to introduce volatility across financial markets, including cryptocurrencies like Bitcoin.
Implications for Bitcoin: If inflation data suggest continued price pressures, the Fed might lean towards maintaining interest rates for longer, which could strengthen the USD and potentially pressure Bitcoin prices. Conversely, lower-than-expected inflation rates could fuel optimism for earlier rate cuts, potentially boosting Bitcoin as an alternative investment.
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