On Monday, Bitcoin successfully regained lost ground, marking its return to the $70,000 level for the first time since its pullback on Saturday. The current market focus is on whether this rebound can be sustained or if it will prove to be a fleeting event.
As of this report, Bitcoin was trading at $70,669 on the Binance hourly chart, with an hourly gain of 0.15%. The chart captures the price action over the two days from March 22nd to the afternoon of March 23rd.
The price opened around $70,500 on Saturday before experiencing a significant drop, influenced by a sharp red candle that pushed it to an intraday low of $67,200. In the subsequent hours, the price oscillated within the $67,600 to $68,800 range, exhibiting a lack of clear direction until Sunday and Monday morning, when neither side could establish dominance.
In the afternoon of March 23rd, Bitcoin saw a breakout. A strong green candle propelled the price from approximately $68,400 above the 50-period Simple Moving Average (SMA) at $69,132, reaching an intraday high of $70,721 before retreating to the current $70,669 level. This upward move clearly crossed the moving average, marking the first closing price above it since Saturday's decline, and was accompanied by the largest volume spike visible on the chart.
Currently, the 50-period SMA is situated at $69,132, below the current price, and has begun to flatten after a sustained downtrend over the weekend. If the price can consistently hold above this average in subsequent trading sessions, it will help repair the short-term technical structure damaged by the weekend's sell-off.
Regarding the Relative Strength Index (RSI), the 14-period RSI is at 61.12, with its signal line at 56.78. Both have risen above the neutral 50 level for the first time since before Saturday's sell-off. During the breakout candle, the momentum indicator crossed above its signal line. The reading of 61 reflects increasing buying conviction rather than momentum exhaustion, suggesting that the price has room to climb before touching the overbought territory above 70. The signal line, below 56.78 and trending upwards, further confirms upward momentum rather than a mere temporary surge.
'False Breakout' Warning
Analyst GainMuse points out that the current market structure might be a liquidity sweep above a trendline. In this pattern, the price briefly breaks above a key resistance level, triggering buy orders and stop-loss orders for shorts, before pulling back into the channel after capturing sufficient liquidity. This pattern bears resemblance to previous quick reversals and false breakouts seen at similar structural points within the same larger downtrend.
The specific risk lies in the potential for the price to briefly breach resistance, luring late buyers into the market upon perceiving a breakout, only for the price to reverse back into the consolidation channel. This scenario would manifest as a sharp rise followed by a sharp fall, leaving breakout buyers at a loss and reinforcing the bearish channel structure.
If Bitcoin can hold...