Bitcoin Retrieves $62,000 - What's Next?

Bitcoin has surged to $63,000 from $58,000 in just a day and a half following the incident involving former President Donald Trump. Will this so-called “Trump pump” lead to further price appreciation, a pullback, or a full retrace?

Daily time frame analysis

BTCUSD - 1 Day Time Frame

Bitcoin has closed above the 12/21 Moving Average (MA) bands for the first time in almost five weeks. It is important to note that the bands have not yet turned green, indicating a pullback is very likely.

The price is currently respecting the July Monthly Open. A strong rejection from the Monthly Open would invite more downside and establish a bearish structure.

It is crucial for Bitcoin to build value above the marked February 2021 Pivot or $60,000. A slow retrace to these prices would be healthy for the market, offering a low-risk/high-reward entry potential.

Conversely, Bitcoin may continue its rally, leaving inefficiencies behind with a strong squeeze due to the clearing of stop losses. After significant moves and the buildup of leveraged positions, the market often wipes out investor positions on both sides.

Therefore, a scenario similar to March 5th could occur. However, with the funding rate below neutral and the market appearing healthy, such a wipeout can be ruled out.

A slow decline is hence the most likely price action to occur.

4-hour time frame analysis

BTCUSD - 4 Hour Time Frame

The 50, 100, and 200MA bands are starting to turn upwards, but they are not yet in the correct order. For a solid entry, it is important to wait until the bands cross. If Bitcoin surges higher without pullbacks, the bands will cross, but the risk will increase.

The best entry around the time the bands cross would be if they cross while Bitcoin ranges and builds value. If Bitcoin goes higher, the next best entry would be at the breakout above the All-Time High.

For now, it is important to wait for price action to develop. Many investors are expecting a full retrace to the start of the “Trump pump” marked on the chart. Therefore, it is likely that this will not happen, and Bitcoin might just retest $60,000, creating an opportunity for a good entry.