Bitcoin prices have been trending lower in the past two weeks and generally remain within a bearish formation. Although momentum appears to be rising, the bulls are not out of the woods yet.
Analysts do not lose hope and remain overly optimistic, predicting a rally that will take the world's most valuable currency to new levels.
Bitcoin is forming 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, indicating an imminent rally towards new all-time highs. This formation is a ray of hope for optimistic traders, especially now that prices have been moving lower and sideways, erasing the gains made in March.
The “cup and handle” formation is an artistic pattern used by chartists To identify potential reversals and confirm trend continuation. In the current setup, as It has been identified By the trader on the weekly chart, the “handle” was formed after the recent price decline from all-time highs. The “cup” comes on the heels of a price decline in 2022 and a subsequent recovery in 2023.
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Historically, if there is a breakout above the handle and the edge of the cup, prices tend to rise to new levels. For this reason, the analyst says that if spot rate buyers persist, a breakout above the current range and all-time highs at $73,800 would be “explosive.”
Currently, prices remain in a downward channel with clear near-term resistance levels identified at around $66,000 and $72,000. A breakout, reading from the candlestick formation on the daily chart, above these liquidation levels may spark demand, lifting the coin to new levels.
Will miners abandon Bitcoin and force prices down?
However, behind this optimistic outlook lies a potential storm cloud: decreased on-chain activity. After a brief spike in on-chain activity on the halving day due to the launch of the Rune Protocol, transaction fees have decreased.
according to YChartsIt is currently priced at $3,206, down from over $128 on April 20. This contraction means that miners are receiving less revenue, which increases the pressure now that there is more pressure on margins after the halving.
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Now that miners are feeling the pinch of reduced block rewards and lower transaction fees, they are likely to… my class Some of their BTC to stay afloat. Their participation, especially in the secondary market, will increase pressure on Bitcoin, forcing prices lower.
Featured image from Shutterstock, chart from TradingView