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Bitcoin Price Analysis - BTC Looks Ready To Continue Bull Run After Last Week’s Triangle Breakout - Can We Overcome the 200-day EMA?


coincodex.com 05 April 2022 14:20, UTC
Reading time: ~5 m

Key highlights:

  • Bitcoin might be down a small 2% on the week but is still up by almost 20% on the month.
  • The cryptocurrency broke above an ascending triangle pattern toward the end of March as it ran into resistance at the 200-day EMA.
  • The breakout of the triangle is a strong bullish signal but the 200-day EMA will need to be overcome for the run to continue.
Bitcoin price $46,489
Key BTC resistance levels      $46,000, $45,780, $44,750, $44,000, $42,950, $42,000
Key BTC support levels     $48,000, $49,350, $50,000, $51,180, $51,992, $52,850, $53,810, $56,000

*Price at the time of publication

Bitcoin is now up by a total of 20% over the past month of trading after the triangle breakout during the final stretch of March 2022. The cryptocurrency had been trapped in a long period of consolidation since the start of the year. Before that, BTC was in a strong downtrend as it retraced from the November highs.

The breakout last week allowed BTC to set new 2-month highs and provided the bullish signal that everybody was waiting for. 

Although this can easily be classified as a technical breakout, there are still quite a few fundamental driving forces behind the move. 

First of all, it is quite interesting to see that the recent breakout might have been primarily driven by spot trading;

Looking at the Futures-to-Spot volume ratio, we can see it is now beneath the 52-week average, indicating that futures have not been the driving force behind the breakout in March. 

Digging deeper into some of the fundamentals, it appears that the uncertainty behind both the War in Ukraine and the impending doom of inflation has started to ease. These two factors have been the major sticking points recently and caused BTC to enter the phase of consolidation since the start of the year.

The Social Volume for both the war and inflation has significantly decreased over the past two weeks as the fear of a bearish cycle driven by these two factors subsides. 

Lastly, with the recent breakout turning sentiment in the market bullish for the first time since November, it seems that HODLers are now starting to move their assets off of exchanges again as they intend to hold their assets rather than keeping them on exchanges to be sold quickly. In the last week, there was a total net flow of -$1.5 billion moving off of exchanges into holders' wallets;

? Weekly On-Chain Exchange Flow ?#Bitcoin $BTC
➡️ $7.9B in
⬅️ $9.5B out
? Net flow: -$1.5B#Ethereum $ETH
➡️ $5.1B in
⬅️ $6.8B out
? Net flow: -$1.7B#Tether (ERC20) $USDT
➡️ $4.9B in
⬅️ $4.4B out
? Net flow: +$451.8Mhttps://t.co/dk2HbGwhVw

— glassnode alerts (@glassnodealerts) April 4, 2022

Furthermore, the following chart shows that the total BTC on exchanges has been falling for quite some time already;

With BTC leaving exchanges again, the on-chain metrics are starting to paint a strong bullish picture that could drive us toward the ATH again over the coming months.

With the market starting to show some signs of positive action, let us take a quick look at the charts and see where we might be heading.

Bitcoin Price Analysis

What has been going on?

Taking a look at the daily chart above, we can clearly see the breakout of the triangle, marked by the dashed lines. Prior to the breakout, BTC was trapped in a period of consolidation as it struggled to make any ground above the resistance at $44,750 (triangle roof & February 2021 support). 

The market was rejected at the roof of the triangle in the first few days of March which caused the coin to fall into the lower boundary at around $38,000 toward mid-March. It was here when the bulls kicked into action and started to drive BTC higher in the final half of the month. 

The breakout occurred on the 27th of March as BTC surged above $44.750 and continued higher until resistance was met at around $48,000 - provided by the 200-day EMA and a bearish .382 Fib Retracement.

Since then, the market has pulled back slightly from this resistance but is using the support of around $46,000 (.236 Fib) as a potential platform to rebound from this week.

NOTE: If you are wondering how to take advantage of any price drop, look at our “How to actually buy the dip” guide.

Bitcoin price short-term prediction: Bullish

Last week’s breakout allowed BTC to finally switch from neutral to bullish after exiting the consolidation phase. The coin would now need to fall back beneath $44,000 to turn neutral. In addition, it would have to continue further beneath the March lows, around $38,000, to be in danger of turning bearish in the short term.

If the bulls manage to push higher, the first level of resistance lies at $48,000. This is significant resistance as the 200-day EMA and a long-term bearish .382 Fib Retracement lies here. Above this, resistance is located at $49,350 (1.272 Fib Extension) and $50,000.

If the buyers continue to break above $50,000, additional resistance lies at $51,180 (1.414 Fib Extension), $52,000 (bearish .5 Fib Retracement), $53,800 (1.618 Fib Extension), and $56,000 (bearish .618 Fib Retracement). 

Where is the support toward the downside?

On the other side, the first level of significant support lies at $45,780 (short term .236 Fib). This is followed by strong support at $44,750 (Feb 2021 support & roof of the previous triangle). If the sellers push back into the triangle, added support lies at $44,00, $42,975 (.5 Fib), $42,000 (Jan 2021 highs), and $40,000.

What are the technical indicators showing?

The RSI has pulled back from the overbought conditions that last week’s breakout provided. It is now still in the bulls favor and has room to drive BTC higher before becoming overbought again.

Keep up-to-date with the latest Bitcoin Price Predictions here.

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