Strong technical resistance levels and a high number of profitable traders pose the risk of modest pullbacks in the Bitcoin market.
Bitcoin’s BTC $63,710 price has rebounded by more than 12.50% just three days after hitting a two-month low of approximately $56,550, reaching over $64,000 on May 4.
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This resurgence has been chiefly fueled by the U.S. Federal Reserve’s commitment to maintaining interest rates unchanged throughout 2024. Additionally, positive U.S. employment data, revealing a decline in jobless claims to their lowest since mid-February, has further bolstered Bitcoin’s ongoing price recovery.
Is there potential for Bitcoin to continue its upward trend, or are we anticipating another downturn?
Retest of $60K support likely
Bitcoin’s potential to undergo a modest correction in May is high when it comes to price chart technicals.
As of May 4, BTC was eyeing a decisive close above its 50-day exponential moving average (50-day EMA; the red wave in the chart below) at around $63,966. Doing so could send the price toward the 0.786 Fibonacci retracement line — near the upper trendline resistance — at around $69,650.
Although the cryptocurrency managed to surpass the 50-day EMA on May 4, it struggled to sustain momentum for a further breakout, encountering resistance near the 0.5 Fibonacci retracement level of around $64,895.
If Bitcoin fails to overcome this resistance decisively, it could start a period of consolidation or even a reversal. In that case, the next downside target appears to be around its multi-month ascending trendline support (the purple line) at around $60,500 in May.
Meanwhile, a further break below the ascending trendline support risks sending BTC’s price toward the 0.0 Fibonacci retracement level near $56,580 in May.
Interestingly, analyst CrediBULL Crypto anticipates the price to fall toward a similar level if it reverses from the $62,000-64,450 resistance area.
Bitcoin NUPL hints cautious upside sentiment
As of May 4, the Bitcoin Net Unrealized Profit/Loss (NUPL) metric has reached 0.54. This indicates that a significant portion of BTC holders are experiencing substantial unrealized gains.
Typically, a NUPL value exceeding 0.5 points to a confident market sentiment potentially paving the way for further price increases. However, it’s important to note that the NUPL is down from its 2024 peak of 0.68, established in March.
A declining NUPL is often seen as a sign of declining euphoria, which typically precedes or coincides with price corrections. As a result of this on-chain signal, Bitcoin’s price may see pullbacks in the coming months.
Bitcoin will reach $85,000-100,000 next: Analysts
A segment of the Bitcoin market remains optimistic about the possibility of a prolonged BTC bull run in the coming months. That includes independent market analyst SHIB Knight, who anticipates BTC’s price to reach $85,000 due to a prevailing bull flag setup.
Another analyst, Steph is Crypto, presents a six-figure Bitcoin price target, citing a so-called relative strength index (RSI) breakout.
Notably, as of May 4, the Bitcoin’s daily RSI reading was breaking above a descending trendline resistance, akin to breakouts in January 2024 and October 2023. These RSI breakouts preceded strong bull run, including BTC’s climb toward $75,000 in March 2024.
“The Bitcoin daily RSI just printed a NEW buy signal,” Steph is Crypto argued, adding:
“This could be the start of the rally towards $100K.”
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