Bitcoin (BTC) has experienced significant growth since the turn of the year; however, some of those gains have been lost in recent weeks with its price falling from above $30,000 to just above $26,000 leaving many in the space split on its future price action.
Despite the price drop, crypto analyst Ali Martinez has identified a buy signal on Bitcoin’s 4-hour chart. After spotting a developing Relative Strength Index (RSI) bullish divergence pattern, Martinez said BTC could surge as high as $27,570, implying a potential upside of 4.5% from current levels.
However, he noted BTC could also swing either way, depending on whether it can hold above the current $26,000 support level, the crypto expert added in a tweet on Friday, May 12. If it doesn’t, Bitcoin could tumble by 4.49% to $25,200.
“The TD Sequential shows a buy signal on #Bitcoin 4hr chart, while an RSI bullish divergence develops. If $BTC can hold above $26,000, expect an upswing to $26,860 or $27,570. Failing to hold above this support level could trigger a downing to $25,200 for #BTC.”
– Ali Martinez wrote in the tweet.
TD Sequential refers to a well-known technical analysis (TA) instrument used to pinpoint the exact moment of trend exhaustion and possible price reversal.
Why is Bitcoin down at the moment?
Another well-known crypto trading expert, Michael van de Poppe, said on Bitcoin is “showing signs of weakness” at the moment, while altcoins continue to recover from a significant retrace. He believes that BTC must reclaim the $26,500-$26,800 price range before hitting longs. Otherwise, the cryptocurrency may plunge to $25,000.
At press time, Bitcoin stood at $26,362, down 3.6% in the past 24 hours. The drop comes amid a broader market sell-off triggered by a number of factors. One of those is declining Bitcoin fees which have reached sky-high levels recently. This decline is now prompting delayed selling from market participants.
Apart from that, the recent support lower-than-expected inflation report also might have contributed to the sell-off, despite the initial push higher from cryptocurrencies right after inflation data was published.
Despite the recent price collapse, Bitcoin remains up nearly 60% since the start of 2023. The world’s number one crypto coin saw a sharp rebound this year following a disastrous 2022 that sent crypto prices to multi-year lows.
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