Bitcoin Possible Rally Before the Halving Depends on Two Levels

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Bitcoin Possible Rally Before the Halving Depends on Two Levels
  • The demand zone at $34,300 and $30,200 are vital to BTC’s next direction.
  • Should buying pressure continue to drop, Bitcoin may fall below $36,000. 
  • A breakout at $37,700 could help BTC hit $50,300 before the 2024 halving.

Bitcoin’s (BTC) fall below $37,000 has brought about caution among holders and traders alike. However, according to analyst Ali Martinez on X, a break below the $36,400 support may lead to the coin’s drop to the critical demand zones of either $34,300 or $30,200.

From the post above, Martinez considered the Unspent Transactions Output (UTXO) realized price to come to his conclusion. The UTXO refers to the amount of Bitcoin left after every transaction conducted on the blockchain.

Bitcoin Risks Another Drop

An assessment of the UTXO showed that there were a lot of transactions and demand for BTC around the $34,300 and $30,200 zones. The increase in demand in these areas implies that there was also a lot of change left after the surge in transactions, making them important price levels to keep an eye on.

From the BTC/USD 4-Hour Chart, the Relative Strength Index (RSI) was 50.20. This RSI reading suggests that BTC buying pressure has reduced. If the RSI continues to fall, a move below $36,000 could be possible in the short term.

The notion was also reinforced by the Moving Average Convergence Divergence (MACD). At the time of writing, the MACD was -104.90. An interpretation of this indicator reading implies a bearish momentum.

Should the red bars of the MACD continue to increase, then a BTC further decline may be inevitable. 

BTC/USD 4-Hour Chart (Source: TradingView)

$50,000 Before April?

In a related development, crypto analyst Eric Krown spoke to his 183,000 YouTube subscribers about Bitcoin’s potential before the halving. For context, the Bitcoin halving occurs every four years, and it is tagged as an event to reward miners. 

The next halving is billed for April 2024 and with six months left, Krown noted that it is time to consider the coin’s potential price. In doing this, the analyst considered BTC’s performance during previous halvings.

Krown added that, in 2011, BTC broke out of a long-term downtrend, and hit a major high just before the halving. In 2015, it was also the same situation and the 2019-2020 cycle brought about the same result. 

Between the highs and lows of these movements, the analyst mentioned that it took around 203 to 301 days. With respect to the current price action, Krown considered using the Fibonacci levels.

When compared with the previous cycles, Krown observed that BTC could come close to the 0.786 Fib level before the halving. From his analysis, the price would be close to $50,300. He, however, noted that there needs to be a break out at $37,700 for Bitcoin to have a chance at hitting $50,000.

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