Hello All.
-Bitcoin has ranged between $30,000 & $40,000 the last week, displaying indecision as investors await a break above either key level.
-A break below the key support level of $30,000 could trigger a massive sell off to immediate support of $25,800 (50% fibonacci retracement level)
-Inversely, A break above the key resistance level of $40,000 could trigger a rally to new all time highs
Bitcoin swiftly tested its key resistance level of $40,000 earlier this week. With the help of a Bitcoin Core update, Bulls held over the support level of $38,000 for around 24 hours. At the time of writing, BTC has broken the support level of $38,000 and quickly plunged -10% in roughly 5 hours as the bears regain short term control. The price has currently stabilized at the $35,000 support level.
Noting this, the last weekend for the crypto markets turned to be bloody as the entire market saw a near -30% retracement from its highs. Going into this weekend, it would not be a surprise if the market experienced another pullback as the strong support of institutional buyers pause.
BTC/USD 1-Week Chart
Looking at the 1 week timeframe, bitcoin has experienced tremendous growth of near 1000% from its march lows to current ATH. This type of growth is very unlikely to continue at this rate of an asset almost valued at 1 trillion dollars. Looking in the past, the halving event of May 2020 is a sure factor that lead to this explosive rally. The question now is; will Bitcoin continue growth to the high predictions of $100k+ now? Or is the cryptocurrency market in for another multi-year bear market? At this point in time it is too early to surely know, although looking at the 1 week analysis, a larger correction seems to be coming our way.
After BTC reached all time highs in 2017, the price went through a near -85% pullback in the years following. Throughout the bear market, the price structure formed a bullish pennant. While looking at the chart, this is shown with the two white trend lines. In July of 2020, BTC broke out of the 3 year bull pennant clearing its key resistance of $10,000. Shortly after, the price retreated back to the $10,000 and held it as support for the first time in over 12 months. This set the stage for BTC to fly to all time highs of $42,000 with the help of PayPal supporting 4 major cryptocurrencies.
Looking at the diagonal red trend line, we can conclude that it has been a well respected trend for over 3 years now. In July of 2017, BTC respected the red trend as support and later went on to reach highs in December of 2017. Later the following year, BTC dropped below the red trend and plunged -50% to its low of $3,100. In June of 2019, the price tested the red trend but could not regain above. Near 18 months later, the price of BTC touched the red trend, perfectly meeting with the current ATH of $42,000. This red trend rejection is likely to cause some months of correction & consolidation. If BTC breaches its current ATH of $42,000 this would be a break above the red trend which could result in a super parabolic rally if the red trend is held.
Looking at the Relative Strength Index (RSI) (purple area), It is important to note BTC recorded an 8 year record high strength value of near 95. Using historical data, each time a strength value that high was reached, the price experienced a minimum -20% pullback, often times -40% or more. Throughout the 2016 & 2017 bull run, each time the weekly RSI value crossed over the overbought mark of 70, it retreated below that shortly after before continuing the trend. At the time of writing, the weekly RSI is still at 85, 15 points away from the overbought mark of 70.
Lastly, looking at the Stochastic RSI (red and green) it is evident the value has been riding near high (second white oval) since November of 2020. Looking back at March of 2019 to June of 2019, the Stoch saw a very similar instance where it was riding near high for months (first white oval). The result of that was a drop from highs of $14,000 (June 2019) to near $4000 (March 2020). The Stoch followed suit and dropped back to lows later in 2019.
In conclusion, $30,000 & $40,000 are the levels to key eyes on. The price has been bouncing throughout this range which indicates extreme indecision in the market. A drop below the key support level of $30,000 could trigger a massive sell off to immediate support of $25,800 (50% fibonacci retracement level). If the bulls can not hold this level, the price may experience another push down to the 62% fibonacci retracement level of $22,200. Looking at the current price level on the chart, the red path is a likely path the price may take if the bears take out $30,000. This red path is a likely ABC correction like BTC did after its high in 2017. On the flip side, a break above the key resistance level of $40,000 could trigger a rally to new all time highs. This path is unknown as the BTC price has never reached over $42,000.
Thank you! Please Comment and Like!
-Bitcoin has ranged between $30,000 & $40,000 the last week, displaying indecision as investors await a break above either key level.
-A break below the key support level of $30,000 could trigger a massive sell off to immediate support of $25,800 (50% fibonacci retracement level)
-Inversely, A break above the key resistance level of $40,000 could trigger a rally to new all time highs
Bitcoin swiftly tested its key resistance level of $40,000 earlier this week. With the help of a Bitcoin Core update, Bulls held over the support level of $38,000 for around 24 hours. At the time of writing, BTC has broken the support level of $38,000 and quickly plunged -10% in roughly 5 hours as the bears regain short term control. The price has currently stabilized at the $35,000 support level.
Noting this, the last weekend for the crypto markets turned to be bloody as the entire market saw a near -30% retracement from its highs. Going into this weekend, it would not be a surprise if the market experienced another pullback as the strong support of institutional buyers pause.
BTC/USD 1-Week Chart
Looking at the 1 week timeframe, bitcoin has experienced tremendous growth of near 1000% from its march lows to current ATH. This type of growth is very unlikely to continue at this rate of an asset almost valued at 1 trillion dollars. Looking in the past, the halving event of May 2020 is a sure factor that lead to this explosive rally. The question now is; will Bitcoin continue growth to the high predictions of $100k+ now? Or is the cryptocurrency market in for another multi-year bear market? At this point in time it is too early to surely know, although looking at the 1 week analysis, a larger correction seems to be coming our way.
After BTC reached all time highs in 2017, the price went through a near -85% pullback in the years following. Throughout the bear market, the price structure formed a bullish pennant. While looking at the chart, this is shown with the two white trend lines. In July of 2020, BTC broke out of the 3 year bull pennant clearing its key resistance of $10,000. Shortly after, the price retreated back to the $10,000 and held it as support for the first time in over 12 months. This set the stage for BTC to fly to all time highs of $42,000 with the help of PayPal supporting 4 major cryptocurrencies.
Looking at the diagonal red trend line, we can conclude that it has been a well respected trend for over 3 years now. In July of 2017, BTC respected the red trend as support and later went on to reach highs in December of 2017. Later the following year, BTC dropped below the red trend and plunged -50% to its low of $3,100. In June of 2019, the price tested the red trend but could not regain above. Near 18 months later, the price of BTC touched the red trend, perfectly meeting with the current ATH of $42,000. This red trend rejection is likely to cause some months of correction & consolidation. If BTC breaches its current ATH of $42,000 this would be a break above the red trend which could result in a super parabolic rally if the red trend is held.
Looking at the Relative Strength Index (RSI) (purple area), It is important to note BTC recorded an 8 year record high strength value of near 95. Using historical data, each time a strength value that high was reached, the price experienced a minimum -20% pullback, often times -40% or more. Throughout the 2016 & 2017 bull run, each time the weekly RSI value crossed over the overbought mark of 70, it retreated below that shortly after before continuing the trend. At the time of writing, the weekly RSI is still at 85, 15 points away from the overbought mark of 70.
Lastly, looking at the Stochastic RSI (red and green) it is evident the value has been riding near high (second white oval) since November of 2020. Looking back at March of 2019 to June of 2019, the Stoch saw a very similar instance where it was riding near high for months (first white oval). The result of that was a drop from highs of $14,000 (June 2019) to near $4000 (March 2020). The Stoch followed suit and dropped back to lows later in 2019.
In conclusion, $30,000 & $40,000 are the levels to key eyes on. The price has been bouncing throughout this range which indicates extreme indecision in the market. A drop below the key support level of $30,000 could trigger a massive sell off to immediate support of $25,800 (50% fibonacci retracement level). If the bulls can not hold this level, the price may experience another push down to the 62% fibonacci retracement level of $22,200. Looking at the current price level on the chart, the red path is a likely path the price may take if the bears take out $30,000. This red path is a likely ABC correction like BTC did after its high in 2017. On the flip side, a break above the key resistance level of $40,000 could trigger a rally to new all time highs. This path is unknown as the BTC price has never reached over $42,000.
Thank you! Please Comment and Like!
Comment:
BTCUSD 6hr is currently showing a Head & Shoulders. The neckline is roughly 34k. If broken, i will be entering shorts around that area.
BTCUSD 6hr is currently showing a Head & Shoulders. The neckline is roughly 34k. If broken, i will be entering shorts around that area.
Comment:
BTCUSD 6 hr- BTC did not want to break the pennant last night. Standby as I expect more grinding. Watch 38k & 33k as turning points.
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This red line has been respected for 4 years. As seen in the past, it took a while to get over it, once that happened it came back and confirmed the breakout and that is when BTC went super parabolic. We are currently experiencing rejection at the Red line ($40,000 range).