Following the ugly mid-March sell-off, which took Bitcoin to a local low of $3,952, the cryptocurrency entered into a choppy correction stage. The recovery is still underway, and we expect more upside to follow, with the next major target the psychological $10,000 level. In this area there is a high concentration of resistances of different nature and time-frames: the dynamic resistance connecting the two significant highs from 2017 onwards; the psychological $10,000 level; and the static resistance at $10,550, which capped the benchmark’s previous upside attempt. For this reason, we believe that the $10,000 – $10,550 resistance zone (if reached) is likely to put a cap to any further corrective attempts and reinstate the long-term downtrend.
Once, selling pressure re-emerges, market participants should brace for another impulsive wave to the downside. At first, Bitcoin will target $6,450, en route to $5,670; once the latter is violated, this will open the way for a more substantial move toward $4,000 and beyond.
Those of you looking for a long entry, should consider the levels just above $3,000. In our view, those would provide a reliable floor to Bitcoin’s slide and allow for a more sustainable rally of the cryptocurrency. Prepare for high volatility at this stage! Stop losses should be a part of such a strategy, as a penetration of $3,000 would result in renewed selling pressure, with an initial target of $1,734