Bitcoin price recently triggered the liquidation of $1 billion in short positions and is rebounding from a crucial support level. According to analyst Josh of Crypto World, the price remains in a substantial sideways consolidation within a larger bullish trend or bull market.
A more bearish trend on larger time frames would only be confirmed if there is a confirmed break below $56,000, which has not happened yet. This means that we are still within a larger bullish trend or bull market. Similar period of sideways consolidation occurred about a year ago, where the price held above the previous significant low, forming a slightly higher low, and continued the bull market in the following months.
For the larger bullish trend to continue, the price needs to hold above $56,000 in the coming months. If it does, the larger bull market is likely to persist.
On the 3-day Bitcoin chart, the RSI is still below 50, historically indicating good buying opportunities for Bitcoin in the longer term. The 3-day chart shows one to two green candle closes, it could confirm a hidden bullish divergence, with higher lows in price and lower lows in the RSI.
On the daily Bitcoin chart, the DXY (U.S. Dollar Index) is still trending bullish, which is usually bearish for Bitcoin. A bearish reversal in the DXY, confirmed by lower lows or lower highs, would be more supportive of a bullish trend in Bitcoin.
Despite this, the price has bounced from a support area between $60,000 and $61,000 multiple times over the past week. Even if the price falls below $60,000, there is support between $55,000 and $58,000.
For a confirmed bullish trend reversal in Bitcoin, a breakout above resistance levels around $63,000 to $64,000, and ideally a bearish reversal in the DXY, is needed. If the price breaks above $64,000 and holds, it could indicate a stronger bullish trend. More confidence in a bullish continuation would come from a breakout above $68,000.
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