Bitcoin is facing a critical test at the $66,000 support level, with the potential for a rebound to retest $72,000 if bulls can defend this key zone.
Following a strong push above $70,000, Bitcoin’s price struggled to break through the $72,000 resistance, leading to a sharp downturn. Failure to maintain support could result in a double top formation, signaling further bearish pressure.
The cryptocurrency dropped below $70,000 and $69,000 levels, breaching a significant bullish trend line at $69,000 on the daily chart. Additionally, it fell below the 23.6% Fib retracement level of the recent uptrend from $56,710 to $71,920.
Bitcoin’s price is currently testing the crucial $66,000 support and the 50-day simple moving average (blue line), with bulls putting up a strong defense. A break below this level could trigger a sharp decline towards $64,400 or the 50% Fib retracement level.
However, if Bitcoin manages to hold above $66,000, it could initiate a fresh uptrend. Immediate resistance is seen at $68,400, followed by a major hurdle at $70,000. A successful break above $70,000 could pave the way for further gains towards $72,000 and potentially $75,000.
Market sentiment is also influenced by the upcoming Fed interest rate announcement, with expectations leaning towards no rate cuts. Despite this, political pressure for rate cuts from figures like Elizabeth Warren highlights the uncertainty in the market.
In conclusion, Bitcoin’s price is consolidating above the crucial $66,000 support level and the 50-day SMA. Maintaining this support is essential to avoid a significant decline in the near future and potentially set the stage for further gains.