Bitcoin price bounced back to over $104,000 on Thursday this week as investors bought the dip following the recent crash. BTC was trading at $104,000 at press time, which helped to boost the performance of the crypto market. So, is this the end of the Bitcoin crash?
Why Bitcoin Price is Rising
There are a few reasons why the BTC price is rising today. First, and most importantly, the ongoing Bitcoin price rebound is likely a dead-cat bounce, a situation where a falling asset bounces back temporarily and then resumes the downtrend.
In this case, the coin was down by 21.6% from its highest level this year, meaning that it was in a technical bear market. As such, some traders believed that it was a bargain and started to buy.
Second, the coin crashed because of the latest Supreme Court hearing on Donald Trump’s tariffs in the United States. Traders anticipate that the court will rule in favor of halting Trump’s tariffs, arguing that it constituted a big tax increase.
Still, it is worth noting that Trump has more tools in place to implement his tariff policy, including using the Section 301 powers given by congress. In this, he can add tariffs after the administration conducts a study and finds that some countries had unfair trade practices.
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Additionally, Bitcoin price rose after the US published strong macro data. A report released by ADP showed that the private sector returned to growth, while more numbers by ISM and S&P pointed to a resilient service sector. These factors also explains why top stock indices like the S&P 500 and Dow Jones rose.
BTC Price Technical Analysis Points to More Downside
The daily timeframe chart shows that the Bitcoin price has been in a steady increase in the past few weeks, moving from a record high of $126,170 in October to a low of $98,958.
Bitcoin has moved below the 38.2% Fibonacci Retracement level at $106,400, a sign that the bearish trend remains. It has also formed a death cross pattern as the 50-day and 200-day Weighted Moving Averages (WMA) crossed each other.
Bitcoin’s rebound happened as the coin moved slightly below the 50% Fibonacci Retracement level at $100,000. It remains below the Ichimoku cloud indicator and the key resistance level at $106,815. This resistance is a notable level as it was the neckline of the double-top pattern at $124,273.
Therefore, the most likely scenario is where the ongoing Bitcoin rebound is a dead-cat bounce as it also remains below the Supertrend indicator, which is a highly bearish sign. The coin will likely continue falling, potentially to the 61.8% retracement level $94,200. This price coincides with the extreme oversold level of the Murrey Math Lines tool.
On the other hand, a move above the key resistance level at $106,815 will invalidate the bearish Bitcoin price forecast and point to more downside in the near term.
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