فصل 22 05/04 BTCUSD: Despite Bulls Reclaiming the 50-Day SMA, It Could Be a Bull Trap
Summary: Bitcoin price has been trying to rally over the past few trading days after gaining support at its 50-day SMA. However, the bulls need a new higher high to revive their hopes for a sustained uptrend; otherwise, it will be taken over by the bears.
Fundamentals
Bitcoin bulls have been rising after managing to get back above the 50-day SMA. However, if the recent rally fails to strengthen, the price will be expected to extend its lower high structure, which is a bearish technical signal.
Momentum indicators now suggest that risks are tilted to the upside in the near term. Specifically, the RSI has risen above the neutral mark of 50, while the stochastic oscillator is also rising following the release of a bullish crossover. However, the triangle chart pattern is showing signs of stagnation, which could trigger a stall on the upside.
If the bulls recover the psychological barrier of $30,000 and push prices higher, the 10-month high at $31,064 could become initial resistance. A break of this range could allow the bulls to challenge the $31,852 level, which is the 50.0% Fibonacci retracement level of the decline from $48,226 to $15,479. A break above this range could set the stage for the 61.8% Fibonacci level of $35,716.
On the other hand, if the closing price continues to fall below the 50-day SMA, the 38.2% Fibonacci retracement level of $27,988 could curb further downside. If that level collapses, bears could target the April low at $26,945. If it fails to stop there, prices could fall towards the 23.6% Fibonacci level at $23,207.
Technical Analysis
As our title suggests, despite the bulls reclaiming the 50-day SMA, it could likely be a bull trap, as the upward momentum of the asset's price has started to show a bullish signal.
Why is this the case? The price rally after the April 21 drop below the $27,850 level has not been able to break through the previous high. And even the psychological level of $30,000 was only briefly triggered before continuing to fall back. But the falling trend is in line with expectations, as the uptrend is not continuous and the bulls are forcibly suppressed by the mid-line of the rising channel.
With such a rhythm, it would become difficult for the bulls to continue higher at current levels, and it does not conform to the continuation of a structural rally. It means that prices would need to adjust further downward, with the ideal range being around the $25,200 level. This adjustment is likely to come out of the sharp decline during the week of March 9. Afterwards, consecutive strong rallies will be achieved, eventually leading to continuous testing to break through the previous high of $31,000.
Overall, the Bitcoin price is currently showing bearish momentum. It is likely to remain blocked at the first resistance level of $28,755 with a bearish reaction. In terms of trading, the main strategy is to go short at highs.
Trading Recommendations
Trading Direction: Short
Entry Price: 29000
Target Price: 25200
Stop Loss: 31100
Valid Until: 2022-05-18 23:55:00
Support: 27720, 27704, 26553
Resistance: 29418, 30028, 31062
