Has Bitcoin Reached Its 2024 Bottom?

Bitcoin has failed to trade higher during the week, which may raise concerns regarding its outlook. Will Bitcoin bounce back in September?

Bitcoin recently lost the February 2021 Pivot and is currently attempting to reclaim it. The price is at a critical juncture: it could either push higher or face rejection and drop to new lows.

4-hour time frame analysis

BTCUSD - 4 Hour Time Frame

The first noteworthy observation is the decreasing volume during this 4-hour downtrend. This creates a volume divergence as the price gradually declines toward potential support. Typically, price movement follows a pattern of impulse, consolidation, and another impulse.

The current slow, choppy decline (consolidation) suggests the possibility of another downward impulse, potentially triggering stops near the swing low of $56,000.

However, if the chart were inverted, it would appear as though the price is struggling to push higher with decreasing volume, often leading to a deeper correction. Thus, if Bitcoin successfully breaks through the pivot, it could continue rising, aiming to reclaim the $59,000 level, a crucial price point.

Such a reclaim could present a strong entry opportunity. However, the most robust confirmation of a continued uptrend would be a reclaim of $62,000, which aligns with the March-July Value Area Low (VAL) as indicated by the Fixed Range Volume Profile during that period.

Reclaiming this level would bring the price back into the entire bull market range, suggesting that, although Bitcoin temporarily lost this level, it built sufficient value and positioned itself for a potential move higher, possibly reaching the Value Area High (VAH) at $69,000.

Bitcoin has never spent this much time trading at these levels, indicating significant demand. However, the catalyst for a sustained move higher is not yet evident.

If the price remains at these levels for an extended period, it becomes increasingly likely that Bitcoin could make another upward push, potentially the last one in this cycle.

4-hour time frame 2020 analysis

BTCUSD - 4 Hour Time Frame

The chart shows price behavior during August and September 2020, before the final push to $69,000.

The current pattern is nearly identical: after a crash triggered by China banning Bitcoin (with this year's crash driven by recession fears and geopolitical tensions), the price recovered, set a high, and then experienced a bull trap, retracing to support at $56,000-$57,000.

The 4-hour 12/21 MA bands crossed (turned green), and after a minor bounce, the price made a new low before breaking out of the bull trap in October.

Entering a position when Bitcoin rises above $59,000 could be risky, as the $56,000 level remains untested. A more prudent entry would be after the reclaim of $62,000, likely leading to Bitcoin reaching $69,000 in the coming months, possibly following the U.S. presidential elections.

Technically, Bitcoin could still drop below $55,000. However, the current environment is markedly different from 2020. Bitcoin is now increasingly viewed as the scarcest store of value, opening up new possibilities for price growth.