Bitcoin prices have been on a downward trend in recent weeks, remaining in a bearish formation. Despite some signs of momentum picking up, bulls are still facing challenges.
Analysts, however, remain optimistic and anticipate a potential surge that could push the world’s most valuable coin to new heights.
A “cup and handle” formation has been identified in the weekly chart by one analyst, suggesting a possible reversal pattern that could lead to new all-time highs. This pattern offers hope to traders, especially as prices have been fluctuating, erasing gains made in March.
The “cup and handle” formation is a technical pattern used by chartists to identify potential reversals and confirm trend continuations. The current setup on the weekly chart shows a “handle” forming after a recent price drop from all-time highs, with the “cup” following the price decline in 2022 and subsequent recovery in 2023.
If there is a breakout above the handle and cup rim, historically prices tend to rally to new levels. The analyst believes that if buyers continue to push from current levels, a breakout above the current range and all-time highs of $73,800 could lead to an “explosive” price increase.
Currently, prices are within a descending channel with resistance levels around $66,000 and $72,000 in the immediate term. A breakout above these levels could spark demand and push the coin to new highs.
However, there are concerns about declining on-chain activity, with transaction fees decreasing after a brief spike on Halving Day. This decline in fees means miners are earning less revenue, potentially putting pressure on margins following the Halving.
With miners facing reduced rewards and declining transaction fees, there is a possibility that they may liquidate some of their BTC to cope with the financial strain. This could add more downward pressure on BTC prices, especially in the secondary market.
Overall, the outlook for Bitcoin remains uncertain, with both optimistic and concerning factors influencing its price movements.