Bitcoin price eyes $25,000 bolstered by pre-Merge momentum buildup

• Bitcoin price breaches $22,000 resistance as investors position themselves ahead of the Ethereum Merge.
• Crypto market capitalization shows signs of a bottom, with the least resistance path shifting north.
• Bitcoin price may retreat to collect more liquidity at the 200-day SMA before resuming its uptrend.

Bitcoin price pushed past resistance at $22,000 on Monday. This came after a market-wide rally incited by the largest cryptocurrency toward the end of last week. Investors appear to be strategizing ahead of the Ethereum Merge, which brings BTC’s $25,000 target well within reach.

Key pointers to observe ahead of the Ethereum Merge

Ethereum is about to undergo its biggest software upgrade, dubbed the Merge. The largest smart contracts token will be migrated from the proof-of-work (PoW) to proof-of-stake (PoS) consensus.

Investors expect the Bitcoin price rally to cool off ahead of the Merge and the release of the CPI data, according to Ekta Mourya, a reporter at FXStreet. Both events may lead to increased volatility in Bitcoin price owing to the changing trader perspectives and inflation levels – amid heightened volatility.

Read more: Ethereum price forecast, a $2,000 revisit, the Merge and ETH blockchain vulnerability

Bitcoin price to cement uptrend after a minor retreat

Inflation levels are expected to rise in the United States, initially suppressing Bitcoin price performance. On the upside, the flagship cryptocurrency targets $25,000, but first, a pullback may take precedence. However, the four-hour chart shows a strong supply area at around $23,000.

Bitcoin price must close the day above this level to validate the upswing to $25,000. Otherwise, investors should start acclimatizing to short-term declines. Traders may confirm new short positions when BTC price breaches the $22,000 support.

 

BTC/USD four-hour chart

It is worth mentioning that Bitcoin price’s impending pullback may be short-lived if the 200-day Simple Moving Average (SMA) reinforces support at $21,469. The region between $20,800 and $21,469 represents a massive demand zone – rendering Bitcoin price northbound.

Analysts like Michaël van de Poppe believe that the cryptocurrency market is signaling a potential bottom. He cites a bounce from the 200-week MA, which had resulted in Bitcoin price pumping to $25,000 in July. A retest followed the rally – then a strong bounce – adding credence to the bullish outlook for BTC price.

The total market capitalization for #crypto is still signalling a potential bottom.

Did bounce from the 200-Week MA and resulted into the rally of #Bitcoin to $25K.

After that, retest and very strong bounce.

Seems that we're good to go. pic.twitter.com/gKagVSktN3

— Michaël van de Poppe (@CryptoMichNL) September 12, 2022

On the other hand, the Direction Moving Index (DMI) on the same four-hour chart suggests that Bitcoin price is gradually exhausting its upside momentum. A pullback is necessary to collect more liquidity before climbing to $25,000.

 

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