Bitcoin price action appears to be around $70,000 like the beginning of a break. The bulls are watching closely for a close break above the $70,000 resistance, which could indicate a new upside leg.
At first glance, this result seems positive. The breakout and closing of the week above $70,000 seems to confirm the strength after months of low stress. However, one technical analyst pointed out that such a move could actually be the worst possible development for investors hoping for Bitcoin to return to new highs.
A 25-day range that has not gained enough strength
Bitcoin is doing something it hasn’t done in months. After a brutal five-month slide that ripped 55% from its peak, price action has spent the last 25 days side grinding within a tight range just under the $70,000 level. At the moment, it looks like it’s finally breaking down.
This technical analysis is interesting shared in X crypto analyst Ardi. The structure of the daily candlestick chart shared by the analyst shows that Bitcoin is consolidating in the 25-day range.
In technical market theory, a range is a build-up phase where buyers and sellers gradually build the groundwork for the next big move. The longer this process takes, the greater the number of reasons that arise to change a stable trend.
According to the analyst behind the chart, the current consolidation has not been long enough to play that role. Therefore, 25 days of sideways movement will do little to counter a five-month low.
Based on this perspective, the structure has not yet developed a base strong enough to support a sustained rally. Therefore, a breakout from this range would occur without the strength that would lead to a long-term upside shift.
Bulls may want more time
Currently, Bitcoin is trading at $71,855. with a daily high of $73,952. This indicates that Bitcoin is now above the $70,000 level, where it spent the entire month of February trading. At the time of writing, Bitcoin is currently printing green on the monthly candlestick.
A weekly close above $70,000 could be enough to build momentum to the upside and BTC to continue moving higher for the rest of the month. That would be it finally finished five months in a row bearish candlestick closes.
However, the healthiest scenario suggested by this framework for Bitcoin would not be an immediate collapse. Instead, Bitcoin price action will benefit from patience and spending more time to build a foundation within the current range.
If Bitcoin spent a few months inside the range instead of a few weeks, the ultimate breakout would occur more structural support. This type of setup is what usually precedes a sustained rally toward new all-time highs. However, it is still too early to say with certainty that BTC has completely escaped its last trading range.
Featured image from Getty Images, chart from Tradingview.com
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