Bitcoin (BTC) has consolidated since its full rise to $ 42,000 and is back above $ 34,000 at the time of writing. The current correction is already 30%, as Bitcoin has repeatedly bounced back from the $ 30,000 range.
However, it remains to be seen if the bitcoin price will start to accelerate again or if the BTC price will need additional consolidation to strengthen.
There have been several periods of accumulation in 2020 where the price of bitcoin has fluctuated for several months. This period is actually necessary to gain strength and last longer. The main question is whether such a limited design will give the same results.
Clear downtrend from $ 42,000
The three-hour chart shows a downtrend from a peak of $ 42,000. This structure is formed by lower elevations and lower descents. In this example, lower heights are grayed out and are important.
Hence, for any bullish reversal, the bitcoin price must break through the critical resistance zone of $ 34,000 to $ 34,500 as this was previous support. If this level fails again to show support, the market will classify it as a support / resistance reversal and further weaknesses are likely.
Bitcoin has been testing the $ 30,000 support zone for a long time. The more often a level is tested, the weaker it is. In addition, there is a weaker bounce off the $ 30,000 range, lowering the altitude.
So, if $ 34,000 does not convert into support, retesting the $ 30,000 area should signal further weakness, bringing the tables between $ 24,000 and $ 26,000.
The 21-week moving average is currently $ 20,000.
Bitcoin’s weekly chart shows a clear convergence between the 21-week moving average (MA) and support, as the 21-week moving average was the key support area for the entire 2017 bull cycle.
Another important feature on this chart is the gap between the 21-week moving average and the bitcoin price. As this gap widens, the price of Bitcoin rises sharply, and this could be a sign that Bitcoin’s value is overvalued in the short term.
Often, the price of an asset – in this case Bitcoin – reverts to the average to test its 21-week moving average for support before continuing. The 21-week moving average is currently pegged to the $ 20,000 price level. This is also the previous all-time high and the last low for a correction, as the market does not want the bitcoin price to fall during the full business hours in 2017.
However, the fall in prices for full-time jobs in 2017 is not guaranteed as most markets tend to buy at that price. The correction against $ 24,000 to $ 26,000 is still very healthy and will match any correction in the beef market.
Total market value is standardized from previous NOTE.
The total market value of cryptocurrencies is consolidating above the previous all-time high for 2017.
Bitcoin’s previous all-time high is unlikely to receive a new test of support, but the total market value could quickly test that $ 750 billion level.
Such a test of the support zone will be normal and can be expected given that the market has been almost vertical in recent months. The consolidation period is more than useful and organic for the market to strengthen and continue to grow.
Possible scenario for bitcoin
Given the current downturn in the markets, there are likely to be more weaknesses that could lead to a more rounded bottom.
In addition, February is often a period of correction for cryptocurrency markets, which means that the bull market could resume in the summer.
If the bitcoin price manages to break through the $ 34,000 area, the next $ 37,500 resistance area will remain at the previous high. When the bitcoin price rises to a new high, the likelihood of a new decline rises to a 21-week moving average.
Fixes like these can be painful for altcoins, but they still provide tremendous opportunities to join teams.