Bitcoin
Will prices easily “explode” beyond $74,000 or fall due to miners’ capitulation?
Bitcoin prices have been trending lower in recent weeks and generally remain within a bearish formation. Although momentum appears to be building, bulls are not out of the woods yet.
Analysts are not losing hope and remain overly optimistic, expecting a surge that would take the world’s most valuable currency to new heights.
Bitcoin forms a “cup and handle” formation on the weekly chart
In a post on X, one of them, MikybullCrypto, he said Bitcoin has formed a “cup and handle” reversal pattern, suggesting an imminent rise towards new all-time highs. This formation is a glimmer of hope for optimistic traders, especially now that prices have been moving lower and sideways, erasing the gains recorded in March.
The “cup and handle” formation is a technical pattern used by chartists to identify possible reversals and confirm trend continuation. In the current setup, as identified by the trader on the weekly chart, the “handle” was formed following the recent price drop from all-time highs. The “cup” follows the fall in prices in 2022 and the subsequent recovery in 2023.
Historically, if there is a breakout above the handle and cup rim, prices tend to rise to new levels. For this reason, the analyst says that if buyers push from spot rates, the breakout above the current range and all-time highs of $73,800 will be “explosive.”
For now, prices remain in a descending channel with clear resistance levels marked in the immediate around $66,000 and $72,000. A breakout, reading the candlestick formation on the daily chart, above these liquidation levels could stimulate demand, pushing the coin to new highs.
Will miners abandon BTC and force prices down?
However, behind the optimistic outlook is a potential storm cloud: declining activity on the network. After the brief increase in activity on the network on Halving Day due to the launch of Rune protocoltransaction fees have been decreasing.
According to Y Chartsit is currently at $3,206, down from $128 on April 20. This contraction means that miners are earning less revenue, increasing pressure now that there is more pressure on margins following the Halving.
Now that miners are feeling the impact of reduced block rewards and declining transaction fees, it is likely that they may liquidate some of your BTC to stay afloat. Their participation, especially in the secondary market, would increase pressure on BTC, forcing prices to fall.
Featured image from Shutterstock, chart from TradingView