Bitcoin once again ran into heavy resistance at the key $53,000 level Tuesday, suggesting that the largest crypto will continue to consolidate before its next big move.
Following a quiet three-day weekend in the U.S., bitcoin Tuesday morning U.S. hours quickly rose from $51,600 to just a few dollars shy of $53,000 before selling pressure quickly forced a reversal, with prices tumbling to as low as $50,700. The price has recovered somewhat since, trading at $51,260 at press time, down 1.15% over the past 24 hours and roughly in line with the broad-market CoinDesk20 Index (CD20) performance.
, the second-largest crypto asset by market capitalization, suffered a similar fate, tumbling to $2,900 after earlier crossing above $3,000 for the first time since April 2022.
Bitcoin's sell-off mirrored price action from Thursday and Friday when intraday rallies above $52,500 reverted almost immediately. Zooming out a bit, prices have roughly traded in a range of $51,000 to $52,500 for the past week.
Continued sideways action ahead?
The failed attempt to break above $53,000 could foreshadow further consolidation in the current range, with prices taking a breather after rising over 30% since late January's post-bitcoin ETF correction. This price range represents a crucial resistance area on long-term charts, which capped rallies in the second half of 2021.
"The current price level is an important technical level for BTC, coinciding with both the peak of the September 2021 'El Salvador' rally and the resistance ahead of the December 4 crash of the same year," Vetle Lunde, senior analyst at K33 Research, wrote in a Tuesday market update.
Analysts at crypto analytics firm Swissblock noted Friday that bitcoin's stalling momentum may foreshadow a deeper pullback and a potential buying opportunity.
The $53,000 area is also marked by the previous market cycle top of the weekly Ichimoku Could, a momentum and trend indicator, which posed major resistance for BTC's price in 2016 and 2019, while breakouts in early 2017 and late 2020 cleared the path for new all-time highs, crypto technical analyst CryptoCon noted.
According to CryptoCon's chart posted on X, bitcoin's price reverted first at similar levels during the prior two bull markets, followed by a lengthy consolidation period, while breakouts to higher prices happened at later stages in bitcoin's market cycle, after the quadrennial Bitcoin halving event.
Simply put, the Weekly Ichimoku Cloud says that a break of the cloud top point at $52,800 marks the run to ATHs and the cycle top.
A break of this point now would be almost an entire year earlier than usual, as most occur during the transition from Blue Year… pic.twitter.com/I0XTbgnNpB
— CryptoCon (@CryptoCon_) February 20, 2024
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"The top of the cloud has twice marked the mid-top, a point of steep rejection and a long sideways period," CryptoCon said in the post. "A break of this point now would be almost an entire year earlier than usual."
Edited by Stephen Alpher.
