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

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 the price. Can Bitcoin break out to the upside?

Is a Bitcoin Breakout Imminent?

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

Based on the technical pattern, Bitcoin could rebound higher if it breaks above 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. 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 price will recover further!”

Bitcoin has nearly reset some key technical indicators, including the Moving Average Convergence/Divergence (MACD), which is used to measure changes in asset strength and direction. According to anonymous cryptocurrency analyst Jelle, this could mean more upward momentum.

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.

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

Despite the bullish chart formation, sentiment around Bitcoin remains in a state of flux. Matt Bell, CEO of Turbofish, said that this week’s macroeconomic developments in particular, 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 Fed Chairman Powell could bring a new wave of volatility to the cryptocurrency market.

Analyst Says Bitcoin Price at $56,000 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.

What’s more, Bitcoin’s issuance danger zone ended on May 6 as the cryptocurrency rallied to the $65,000 mark.

However, Bitcoin faces significant resistance near $63,500 and $63,700. A break above $63,700 would liquidate more than $516 million worth of accumulated leveraged short positions, according to Coinglass.