Key Points
- Bitcoin has seen steady gains over the past three weeks, breaking above a month-long descending trendline resistance.
- The Texas Bitcoin Strategic Reserve Act, which could see the state holding Bitcoin in its balance sheet, will be deliberated on April 23rd.
Bitcoin has been on the rise, showing steady gains over the past three weeks. This is largely due to an increase in demand.
Breaking Trendline Resistance
In the past three days, Bitcoin was able to break above a descending trendline resistance that lasted for a month, resulting in a 4.5% price gain. This coincided with the U.S. Dollar Index (DXY) reaching its lowest level since 2022, which was accompanied by rising Bitcoin prices.
However, despite gold reaching a new all-time high, the argument that investors are turning to gold as a hedge against uncertainty doesn’t hold for Bitcoin. The crypto asset has been in a steady downtrend for three months, and the recent gains don’t necessarily mean it’s a safe asset.
Upcoming Deliberation on the Texas Bitcoin Strategic Reserve Act
On the 23rd of April, the Texas Bitcoin Strategic Reserve Act will be deliberated. This act seeks to add $500 million annually, making Texas the first state in the U.S. to formally hold Bitcoin in its balance sheet, if passed.
Technical analysis showed that Bitcoin bulls were making moves. The trendline resistance was retested as support on the 20th of April. This breakout was accompanied by a steady uptrend on the OBV over the past three weeks, indicating that buying pressure was prevalent.
A daily session close above $87.5k would flip the Bitcoin swing structure bullishly, signalling a long-term uptrend was possible. However, the $92k level represented a strong resistance level.
Bitcoin Decoupling from Traditional Markets
The rise of Bitcoin while the Dow Jones Index (DJI) fell nearly 1000 points on Monday suggested that crypto is decoupling from traditional markets. However, swing traders should prepare for increased volatility and a potential reversal.
The 3-month liquidation heatmap of Bitcoin indicated that the recent rally could see a bearish reversal at $89.2k-$91k. The price generally gravitates toward liquidity. Beyond $91k, the $100k was the next notable magnetic zone. The intervening region also had sizable liquidation levels.
The chances of a sustained move higher were hurt by these reversal zones, and traders should exercise caution as the price approaches $91k.
