The price of bitcoin is rising. And there’s a case for $45,000 in a month.

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Bitcoin and other cryptocurrencies rebounded on Tuesday after paring gains following the latest leg of a rally that saw digital assets soar in 2023. Traders should brace for more weakness before a possible large peak.

Bitcoin price rose 2.5% in the past 24 hours to $30,175. The largest digital asset broke the critical $30,000 mark last week, psychologically significant as that was where prices were in June 2022, before crypto selling accelerated in a brutal bear market. Bitcoin, up around 80% this year, has struggled to consolidate above $30,000, let alone its recent peak near $31,000, and even slipped below $29,500 at sometime on Tuesday.

Support for Bitcoin is defined by former resistance near $25,200. This is a natural place for a pullback to weakness, we would look to position ourselves for a long-term resistance test around $35,900, said Katie Stockton, managing partner at technical research group Fairlead Strategies.

Cryptos will likely remain susceptible to macroeconomic forces in addition to stock market trends and swings in the Dow Jones Industrial Average and S&P 500. Digital assets have become more closely correlated to equities over the past year amid rising Federal Reserve interest rate slump in response to decades-high inflation. Higher rates dampen investor risk sentiment, slamming both asset classes.

The rally across cryptos this year has largely come as the Fed soon becomes more dovish on monetary policy, a narrative that will continue to evolve ahead of the central banks’ next move on May 3. As corporate earnings capture the attention of the stock market this week, there will also be economic data and remarks from central bank officials that could move cryptos. In the short term, Bitcoin rebounded higher on Tuesday despite declines in the stock market, where investors were watching earnings closely.

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With the catalysts ahead, traders should prepare for the short-term weakness outlined by Fairleads Stockton, but there is also a bullish technical argument for a price surge over the next month. It has to do with the similarity between the price dynamics of the 2022 sell-off and 2018, when Bitcoin’s last bull market fell, described Vetle Lund, an analyst at crypto research group K33.

Both price cycles have similar peak-to-trough durations, Lund said, with market lows of similar duration and similar recovery trajectories and bear market rallies.

While no one should expect a one-to-one mirror of the current withdrawal with previous withdrawals, the resemblance to the 2018 withdrawal is staggering, Lund said. If history repeats itself, Bitcoin will peak around May 20 at $45,000.

Beyond Bitcoin, Ether rose 1% to $2,100. The second-largest crypto recently outperformed following a critical upgrade to the Ethereum blockchain network that makes the staking process that allows token holders to earn interest simpler. Smaller cryptos or altcoins were more mixed, with Cardano up 1% but Polygon down 1%. Memecoins were stronger, with Dogecoin up 2% and Shiba Inu

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advance of 1%.

Write to Jack Denton at [email protected]

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