By Chris Hollingworth 
Bitcoin (BTC) has experienced a 5% increase in value over the past 24 hours, showcasing a rally from a recent low of $76,450 to a peak of $83,786 on March 12. Notably, on the weekly chart, BTC’s price has successfully retested its 50-weekly exponential moving average (50W-EMA) indicator, serving as a significant support level.
Maintaining a position above this indicator since August 2023, Bitcoin’s price demonstrates a long-term bullish stance. The 50 EMA level has consistently acted as a support level for Bitcoin over the last 18 months, with a notable bounce in September 2024 propelling the cryptocurrency to new all-time highs.
Prior to the recent relief rally, Bitcoin exhibited bullish divergences on both low time frame (LTF) and high time frame (HTF) charts, indicating a potential shift in momentum. These bullish divergences, observed between the price and the relative strength index (RSI) indicator, suggest an improvement in underlying bullish momentum, potentially reversing the prevailing bearish trend.
Bullish divergences were visible across the 15-minute, 1-hour, 4-hour, and 1-day charts, enhancing the likelihood of a short-term rebound. The RSI forming higher lows on each chart after dipping below the oversold region indicates waning sell pressure and the potential for a trend reversal.
Bitcoin’s recent dip below previous lows at $78,150 effectively cleared existing liquidity on the downside, facilitating a price rebound above $80,000. Analysis from the liquidation heatmap reveals that BTC has eliminated downside liquidity, with over $250 million in leveraged positions now concentrated between $85,000 and $87,000, suggesting a potential rally towards this range in the near future.
On the 1-hour chart, Bitcoin has formed an inverse head and shoulders pattern, with confirmation expected upon a candle closing above the neckline at $83,800. A decisive break above this level could propel Bitcoin towards $89,000, aligning with Fibonacci retracement levels and recent price highs and lows.
However, the bullish pattern would be invalidated if BTC drops below $78,500, jeopardizing the current higher-high setup on the lower time frame. Analysts anticipate consolidation near resistance levels between $86,000 and $88,000, with potential for a drop to form new price lows in the coming days or weeks due to a strong demand zone around $74,000 to $70,000.
In conclusion, the recent price movements and technical indicators suggest potential short-term bullish momentum for Bitcoin, but market dynamics remain subject to change. Investors should exercise caution and conduct thorough research before making any investment decisions.
