Key causes and where to expect a bounce to $70,000

Bitcoin (BTC) recently appeared poised for a major bullish push and has seen a notable price correction. After hitting a two-month high of $66,500 last Friday, the cryptocurrency retreated about 6% last week to around $60,000 on Thursday.

Key Buy Zones for Bitcoin

The expected bullish trend for Bitcoin was initially driven by easing economic conditions, especially following the US Federal Reserve’s decision. decision to cut interest rates on September 18.

However, the escalation geopolitical tensions in the Middle East have changed investor sentiment, leading many to seek refuge in traditional safe-haven assets such as gold.

Furthermore, concerns about the macroeconomic outlook have intensified, particularly after Federal Reserve Chair Jerome Powell suggested the possibility of further 0.50% rate cuts in the coming months.

This confluence of factors has led to greater market liquidationwith Bitcoin, Ethereum and major market cryptocurrencies experiencing significant liquidity outflows estimated at nearly $300 million, as reflected in the total cryptocurrency market capitalization.

Despite the recent drop, crypto analyst VirtualBacon provided more insight optimistic outlook on social media, noting that Bitcoin has returned to the “bull market support band.”

The analyst highlights that this support band has historically provided a cushion during corrections between current market prices and the $62,500 mark on the weekly period.

VirtualBacon emphasized that a weekly close above $58,000 could signal a healthy correction, setting the stage for a resurgence. Conversely, a break below this threshold would require re-evaluating bullish strategies.

The analyst pointed out two keys buy zones: $62,500 and a lower range between $58,800 and $60,000. These zones coincide with previous highs and align with the 200-day exponential moving average (EMA), an important long-term support level for any bull market.

The 200-day EMA, currently around the $60,000 mark, has been pivotal for the past six months. It has acted as support and resistance during various phases of Bitcoin’s price movements in March, May and July of this year.

September employment report looms large

In its analysis, VirtualBacon explained that if Bitcoin recovers from $60,000, it would be a sign of strength in the market. However, a daily close below $58,000 (or a weekly close below that level) could signal a possible bearish trend reversal.

VirtualBacon outlined a strategy to capitalize on the current decline, indicating a willingness to accumulate btc in the $58,000 to $60,000 range, which he considers a high-risk, high-reward zone. However, he warned that a close below $57,000 would be a major red flag.

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For the analyst, as long as Bitcoin remains above $58,000, there is a possibility of a higher low, setting the stage for a new price peak above $66,000. However, macroeconomic factors will remain crucial in shaping market sentiment.

This week’s launch in September. jobs report According to the analyst, it will be particularly significant as it will provide information on the current unemployment rate, which could influence future Bitcoin price movements:

• 4.2%: Very bullish for the market.
• 4.3%: neutral outlook.
• 4.4%: caution advised.
• 4.5% and more: bearish implications.

At the last meeting of the Federal Open Market Committee (FOMC), Jerome Powell identified 4.4% as a critical threshold. If the unemployment rate exceeds this level, VirtualBacon believes it could signal trouble for the overall economic outlook.

Featured image of DALL-E, chart from TradingView.com