Bitcoin price is showing strong strength as Bitcoin (BTC) has risen more than 60% from $ 10,000 to $ 16,500 in six weeks, leaving many investors close behind.
These investors waited for the gap on the Chicago Mercantile Exchange to close at $ 9,600, but it didn’t. But can the market expect a correction or does the market see greater power?
Bitcoin is recording green candles for the sixth year in a row
The daily chart shows some important values that should be monitored. If Bitcoin price is to continue its upward momentum, it will need to reverse the previous resistance area to find support.
The previous breakthrough was $ 13,200, and similar examples have also been seen. This area played a role of resistance before the breakthrough but immediately became a new support. This reversal of support and resistance ensures an additional continuation to $ 16,500.
The $ 15,500 to $ 15,700 range means the same key construction as the previous $ 13,200 range. Remaining in the $ 15,500-15,700 range means the uptrend is likely to continue, while a break below it confirms a bearish divergence that will push prices down. This bearish move could cause BTC to drop to $ 14,000.
Still change $ 12,000
BTC / USDT chart for a week. Source: TradingView
The weekly timeframe shows a weak resistance level of $ 12,000 that was broken six weeks ago. The next major resistance is between $ 15,750 and $ 16,500, which was hit last week.
However, can this situation continue after this large-scale gathering? One of the arguments is that there are still many untested levels below the current spot rate at which liquidity can be found.
As more and more institutions join the Bitcoin trend, market sentiment has shifted from bearish to bullish optimism, so the retracement is not surprising.
As shown in the graph, the correction can come towards $ 12,000, which was previously a key level. After a two-year waiting period, this level was broken. However, the area was not retested.
Investors and traders should view this level as a potential entry point for interest rates.
Indicators of fear and greed show that the market is overheating
The Crypto Fear and Greed Index measures various variables to measure current market sentiment, and current market sentiment is still 90 (out of 100). This level is called “Extreme Greed”.
This level has only been reached once so far. The former is the culmination of the bullish race in June 2019.
Of course, this is not a completely reliable indicator, and traders and investors should not blindly predict their strategies based on this indicator. Still, it can give you useful insight into the current boom in the market.
Given that the FOMO – the fear of missing out on an opportunity – has already begun, this patch will get everyone back on their feet. As mentioned earlier, this drop is actually very healthy for the insane market.
See the low period
Since the break of USD 10,000, the 4-hour chart has shown a clear uptrend. However, there are a few key levels that need to be maintained to maintain this dynamic.
The red square shows the liquidity at the most recent highs. To remain bullish, there should be a clear break in this resistance area as the USD 16,500 area will immediately reverse to seek support. Otherwise, this breakout is likely to become a fake breakout and is just a liquidity click before the market reverses.
As mentioned earlier, the $ 15,600-15,750 area should continue to trend higher and the next major resistance area is near $ 17,500. If this area does not find support, the next support area is between $ 14,800 and $ 15,000. There may be a bearish reversal of support / resistance in the USD 15,600-15,800 area, which may lead to further declines.
In this case, the following levels of support might range from $ 13,700 to $ 13,900 and $ 12,800 to $ 13,200.