Bitcoin (BTCUSD) Intraday Outlook
- Bitcoin gains positive traction on Monday as US Treasury sell-off eases.
- The move uphill leads the BTC/USD rate out of its Falling Wedge pattern.
- While the setup favors bullish traders, the pair needs more volume to confirm a short-term upside bias.
Bitcoin reached above $48,500 ahead of the New York opening bell on Monday, paring a portion of the losses it faced in the previous weekly session.
The benchmark cryptocurrency hit an intraday high of $48,653 in a follow-up to a slowdown in the US government bond sell-off and MicroStrategy’s announcement of adding another $15 million worth of BTC to its balance sheet. BTC/USD dropped more than 21 percent last week due to a dramatic spike in bond yields, which led investors to assume that the uptick would promote Federal Reserve to raise its benchmark interest rates.
Bitcoin surged by more than 1,200 percent from its mid-March nadir of $3,858, helped by the US central bank’s near-zero rate policy that made holding Treasuries and US dollar less attractive. First retail traders and then institutional investors flocked into the cryptocurrency for its anti-inflation narrative.
The boom later attracted corporates, including Square, Tesla, and MicroStrategy, to add BTC to their company’s balance sheets. In late February, the BTC/USD exchange rate reached above $58,000, which soon followed a massive correction as traders’ focus shifted on the rising yields. As of this Sunday, the pair was trading at as low as $43,178.
Falling Wedge
Bitcoin’s latest spike helped it rise above the Falling Wedge range. Technically, traders consider the upside move as a sign of an extended bullish momentum, with their price targets sitting near where the Wedge began.
The rosy picture risks tainting as Bitcoin runs into a sequence of successive resistance levels ahead. At first, the 50-4H simple moving average expects to hold the cryptocurrency from extending its upside run. After that, levels near $52,170 could further reduce Bitcoin’s short-term bullish bias as a flipped support-to-resistance level.
More limitations for the Wedge breakout come from the depressed volumes. Traders typically confirm an extended move upward if it accompanies a spike in trade volumes. But with that low, it is likely Bitcoin resumes its downtrend to invalidate the Wedge structure altogether, with the rising yield fears providing more tailwinds to the downside risks.
Should it happen, BTC/USD expects to retest the levels between $42,000 and $44,000 as support. Meanwhile, a lower breakdown would risk crashing the price to $40,000 or the upper $30,000.