Bitcoin (BTC) needs to surpass the August high of $65,200 to break its ongoing downtrend, according to analysts at cryptocurrency exchange Bitfinex. They emphasize that this level is crucial for confirming a shift away from the bearish pattern characterized by lower highs since March.
Despite a recent rally of 16% after testing lows below $54,000 earlier this month, analysts caution that a bullish reversal is not yet assured. The August high represents a significant barrier; BTC has yet to eclipse any previous highs without subsequently forming new lows since its all-time high of $73,666 on March 14.
“The proximity to the August 25 top of $65,200 is critical,” the Bitfinex analysts noted. “The failure to break this level would keep BTC in a technically defined downtrend.”
The downward trend is illustrated by a series of lower highs, including the March 20 high of $60,780. A convincing move above $65,200 would not only signal the potential end of this interim downtrend but also suggest a resumption of the broader uptrend that began from the October 2023 lows below $30,000.
Positive macroeconomic factors, such as the recent Federal Reserve rate cut, a large stimulus announcement from China, and a resurgence in risk appetite in financial markets, could support BTC’s rise above the critical level. However, analysts have noted a flattening of the cumulative volume delta indicator since prices surpassed $63,500, indicating a slowdown in spot market buying pressure.
“This could lead to a consolidation period near current price levels, as seen after previous rallies that began with strong spot buying but were followed by futures market activity,” they cautioned.
The analysts concluded that while the potential for a breakout exists, the current trends in buying volume and market activity warrant a cautious approach.
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