Bitcoin bottoming out at $56,000? BTC price chart hints at breakout within days

Author: Zoltan Vardai Source: cointelegraph Translation: Shan Ouba, Golden Finance

A popular Bitcoin chart suggests that the price of Bitcoin could break out of its current range. However, this week's macroeconomic news could also have a significant impact on prices. Can Bitcoin break out to the upside?

Is a Bitcoin breakout imminent?

On the four-hour chart, the price of Bitcoin presents an inverse head and shoulders pattern, which technical analysts use to predict a reversal of a previous downtrend.

Based on technical patterns, Bitcoin could rebound higher if it breaks through the trendline, according to a May 13 article by cryptocurrency investor Quinten Francois, who wrote:

“Spotted an inverse head and shoulders pattern on the Bitcoin chart. It’s not the prettiest pattern I’ve ever seen, but I’ll take it. There are multiple ways to draw the neckline, but this one makes the most sense to me. Break through the neckline and prices will recover further!”

On the daily chart, Bitcoin’s relative strength index (RSI) has risen to 49 from 33 on May 1, indicating that BTC prices are currently at fair value. The RSI is a popular momentum indicator used to measure whether an asset is oversold or overbought based on the magnitude of recent price changes.

According to a chart shared with his 74,200 followers on May 13, in line with previous predictions, anonymous cryptocurrency trader Mags also expects a price breakout based on key technical indicators:

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Despite bullish chart formations, sentiment around Bitcoin remains in a state of flux. Matt Bell, CEO of Turbofish, said that this week’s macroeconomic developments, especially the Consumer Price Index (CPI) on May 14, could have a significant impact on its short-term price trajectory.

While the 4-hour chart hints at a potential trend reversal with an inverse head and shoulders pattern, it’s important to note that Bitcoin’s price action is strictly confined to a narrow trading range…Factors such as U.S. macro data and insights from Jerome Powell, the Fed Chairman, could bring a new wave of volatility to the cryptocurrency market.

Analyst Says Bitcoin Price at $56K Marks Local Bottom

Popular cryptocurrency analyst Rekt Capital wrote in a May 13 article that Bitcoin’s retracement to $56,000 could mark a local price bottom:If $56,000 is not the bottom, then the current pullback would officially equal the longest retracement of this cycle (63 days). However, history shows that the current pullback ends at $56,000 and 47 days.

More importantly, Bitcoin's issuance danger zone ended on May 6 as it rose to the $65,000 mark.

However, Bitcoin faces significant resistance around $63,500 and $63,700. According to Coinglass, a price breakout above $63,700 would liquidate more than $516 million worth of accumulated leveraged short positions.