Bitcoin Price Rebounds to $84K as Nansen Analyst Predicts Consolidation Phase

Bitcoin has experienced a notable rebound, climbing above the key resistance level of $84,000 after dipping to a multi-month low of $78,200 on Friday. This recovery coincides with a general recovery in U.S. equities, with major indices like the Dow Jones and Nasdaq 100 moving higher. The potential catalyst for Bitcoin’s rebound seems to be several factors, including bullish news from BlackRock, a major U.S. asset manager. BlackRock reaffirmed its positive stance on Bitcoin, confirming that it plans to allocate about 2% of its model portfolio assets to its IBIT Bitcoin ETF. This development added some positive sentiment to Bitcoin’s price movement.

Additionally, the release of a favorable personal consumption expenditure (PCE) report in the U.S. provided some relief. The core PCE, a key inflation gauge closely monitored by the Federal Reserve, rose by only 0.3% from December and 2.6% year-over-year, marking its smallest increase since 2021. This data suggests inflation might be on a downward trajectory, aligning with the Fed’s hopes for further interest rate cuts, though some geopolitical uncertainty, such as potential new tariffs hinted at by Donald Trump, could complicate this outlook.

Despite the recent rebound, market analysts are divided about Bitcoin’s future direction. Aurelie Barthere, a principal research analyst at Nansen, predicts that Bitcoin may enter a consolidation phase following its recent sharp decline. Barthere noted the high volume of “panic” selling, which is often followed by a period of consolidation with higher lows, signaling that buyers may slowly regain confidence after having been burned during the sell-off.

However, other analysts, like Mark Cudmore from Bloomberg, are more cautious, warning that Bitcoin may face further downside. Cudmore suggests that Bitcoin could be headed for another significant drop, pointing out that the cryptocurrency has historically experienced crashes of over 70%. He identifies the $72,000-$74,000 range as a key technical support zone, which could mark the beginning of a “crypto winter” if Bitcoin drops to this level.

From a technical perspective, Bitcoin has formed a double-top pattern at $108,532, with its neckline positioned around $89,000. The pattern suggests that Bitcoin could see a further decline. If the price moves down to the neckline, which is around $89,000, and drops 18% from there, it could reach a target price of approximately $72,850. This level aligns with Bitcoin’s previous high in March 2023, and if Bitcoin reaches this level, it could mark a potential bullish reversal, signaling the completion of the break-and-retest pattern.

Overall, Bitcoin’s immediate price action is uncertain, and while some analysts see the potential for consolidation and a return to higher levels, others warn of further downside. The next few weeks will be crucial in determining whether Bitcoin can maintain its recent recovery or if a deeper correction is on the horizon.