May 14th Technical Analysis: Bitcoin
Bitcoin price shows weakness at $50,000, but this crucial technical formation could elevate it to $60,000
Bitcoin recoils from recent support at $46,000 as bulls focus on gains toward $60,000.
The formation of a double-bottom pattern could catapult BTC significantly upward.
Bitcoin has since Wednesday stalled under around $50,000. On the downside, immense support between $46,000 and $47,000 has ensured the bearish leg does not stretch further. Meanwhile, BTC has been pivotal at $50,000, unable to make progress above this critical level.
Bitcoin’s consolidation could culminate in a massive upswing
Since the breakdown on Wednesday, the flagship cryptocurrency has not recovered as investors desired. The tug of war at $50,000 neither favors the bulls nor the bears. Therefore, the pivotal trading action will most likely last longer.
The four-hour chart brings to light a double-bottom pattern, a highly bullish formation in technical analysis. It comes into the picture after an asset hits a lower price point a couple of times. Note that there is usually a moderate price peak between the bottoms.
The double-bottom pattern is usually confirmed when the asset bounces off the bottom support level and makes its way through the previous peak. Identification of crucial support and resistance levels helps to avoid failed double-bottom patterns.
BTC/USD four-hour chart
Meanwhile, it is essential to realize that a confirmed break above $50,000 will prove that recovery toward $60,000 has potential. Moreover, holding onto support at the double-bottom pattern is key to jumpstarting the uptrend.
Short-term technical indicators continue to send mixed signals, nonetheless. The Relative Strength Index (RSI) levels at 40, showing that sideways trading may take precedence.
On the other hand, the Moving Average Convergence Divergence (MACD) has a bearish impulse, implying that losses could continue in the near term.
Bitcoin intraday levels
Spot rate: $48,920
Trend: Bearish bias
Support: $47,000 and $46,000
Resistance: $50,000, $52,000 and $54,000