Bitcoin’s price has increased significantly compared to where it was about a week ago. It has now managed to recover above a highly coveted level, restoring some confidence in the market. However, the digital asset’s position is currently located is precarious. Even though it appears to have found its footing above the $31,000 level, it remains unclear what this recovery means in the short term.
Breakout or Fakeout?
It is worth noting that the price of BITCOIN has long-ranged between $29,000 and $30,500. It stayed quite a while here because the cryptocurrency had been consolidated for quite some time. It had broken out of this consolidation point with its most recent recovery. However, there hasn’t been enough recovery to be certain that this is a trend that will continue.
According to indicators, this could be a critical turning point for the price of Bitcoin. Where it goes from here will most likely determine the digital asset’s path for the rest of the month. To truly establish this as a breakout position, the cryptocurrency would need to range upwards and break its next significant resistance point, $34,500.
Bitcoin (BTC/USD) Technical Outlook
Given that Bitcoin is still hovering around $31,000, a rally towards $34,500 would need to be accompanied by tremendous market momentum. If this occurs, the digital asset can reestablish support at the same level that provided a good cushion at the start of the year.
A potential takeout would have severe consequences for the crypto market in terms of a reversal. The digital asset has managed to establish strong support at $29,000, as evidenced by recent market movements. If Bitcoin falls below $29,000, it will likely test the $25,000 support level before beginning another recovery trend. Good luck!