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Bitcoin (BTC/USD) Technical Setup in Play

Bitcoin (BTC/USD) Technical Setup in Play

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BITCOIN (BTC/USD) PRICE, CHARTS AND ANALYSIS:

Short on Breakout and Retest of Triangle Pattern

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BITCOIN OUTLOOK

Bitcoins recent rally found resistance around the $28500 mark with consolidation being the theme since. The rally was partly fueled by a weaker dollar as well as a rise in both liquidity and volatility seems to have run out of steam.

As the fallout from the banking turmoil continued to roil markets BTCUSD reached a 9-month high as market participants could have viewed bitcoin and cryptocurrency as an alternative to cash storage. This would come as somewhat of a surprise given last year's public failure of FTX as well as the ongoing scrutiny of the crypto industry, particularly in the US. Hard wallet crypto storage does however have a sense of appeal and mitigates such risks in these somewhat uncertain times and crypto prices seem to have benefitted.

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JPMorgan bank said the US banking crisis has opened up opportunities to increase market share for those exchanges offering banking services. Whether adoption will be smooth and swift though remains to be seen given some of the public scandals in 2022 and increased regulatory scrutiny. Nasdaq has also announced its plans to launch cryptocurrency storage services by the end of Q2 2023. Whether these developments will support crypto and bitcoin prices in the months to come remains up for debate.

Breaking news just a while ago regarding Binance the world’s largest crypto exchange, and its CEO Changpeng Zhao were sued by the US CFTC for allegedly breaking trading and derivative rules. This could further weigh on prices as more information is released on the matter supporting the narrative of lower prices in BTCUSD.

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TECHNICAL OUTLOOK

From a technical perspective, Bitcoin has been in a state of consolidation for the best part of 10 days since breaking above the $28000 mark. On the 4H chart below we can see the triangle pattern in play with a break and candle close below the triangle likely opening up a retest of the 100-day and 200-day MAs resting at $26000 and $24400 respectively. Given that we are currently breaking out with a bit of momentum a retest of the triangle breakout may be the smarter play and provide a better risk-to-reward opportunity for potential shorts.

Changes in risk sentiment may play a role on any potential move and may be something to keep an eye on. The Banking sector turmoil remains far from over while geopolitical risks have reared their head over the weekend and could propel BTCUSD higher if they do escalate.

BTC/USD Four-Hour Chart – March 27, 2023

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Source: TradingView

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Written by: Zain Vawda, Market Writer for DailyFX.com

Contact and follow Zain on Twitter: @zvawda

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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