After a series of sell-offs, Bitcoin is recovering, rebounding early in the week alongside risky assets on signs of de-escalation in the US-Israel war against Iran.
Markets took a breather after Trump's announcement of a postponement of strikes on Iran. However, the situation remains tense and the risks remain high, especially given that Tehran itself denied participating in negotiations with Washington.
The Bitcoin price rebounded from support near $67,300 and returned above the psychological $70,000 mark. It briefly approached $71,800, which capped the rally. On Tuesday, BTC is trading at $71,000, trying to determine its next direction. As shown by an analysis of the BTC/USD chart by Investing.com's WarrenAI smart chatbot, the daily chart signals a localized bullish breakout, but the current rally appears to be playing with fire.
The leading cryptocurrency managed to break out of its protracted range, consolidating above the Bollinger Bands and the Ichimoku Cloud. The MACD indicator also confidently turned up, confirming the strength of the short-term momentum.
Nevertheless, Bitcoin remains firmly in the grip of a bearish trend globally: the price is 23% below its 200-day moving average. This means that buyers are currently swimming against a strong current, and long-term selling pressure is still enormous.
The main threat to investors at current levels lies in the risk of a large-scale bull trap forming. The coin has approached a strong resistance zone between $71,160 and $74,600. If Bitcoin fails to firmly consolidate above $71,800, the current upward momentum could quickly peter out. A price increase without a corresponding increase in trading volume is a warning sign that major players are not yet ready to support this rally.
In this situation, WarrenAI recommends waiting for a strong daily candlestick close above the local high of $71,800, which would open the door to targets in the $79,000 region and beyond. The key point at which this positive scenario can be reversed is $66,228. If sellers manage to push the price below this level, this will signal bullish capitulation, with the subsequent risk of a collapse all the way to $60,000.