Bitcoin (BTC) has seen explosive growth in the last two months, especially as institutions move to a new asset class. The latest is Blackrock, which has announced its interest in trading Bitcoin futures, while Grayscale continues to earn BTC at an accelerated pace.
However, after a massive jump, the asset price should fall for some support tests when investors post profits. It is a good supply and demand cycle.
BTC / USD is currently in a correction phase with the Bitcoin rally exceeding $ 40,000. The main question is how far the correction will go, and whether the $ 30,000 level will be strong enough to keep the bears away.
It takes $ 30,000 to stay optimistic
Bitcoin’s daily chart has shown a significant rally in recent months. However, after the last rally, there are some weaknesses, after which the price was corrected by about 30%.
One of these is the continuation of lower highs after the recent peak of $ 42,000. These lower heights merge with weaker withdrawals from the support area.
In this case, $ 30,000 space was held earlier. But when it comes to the bulls’ worries, the bounces from this area are getting weaker.
If the $ 30,000 region does not hold, there is likely to be a further correction to $ 24,000, indicating a 40% withdrawal from recent highs.
Corrections in a beef market are quite common.
BTC / USD weekly chart. Source: TradingView
This weekly chart illustrates the previous bullish cycle from 2015 to 2017, and highlights some corrective phases.
First and foremost, the 21-week moving average (the orange line) is an important indicator of the continuation of the bullish cycle. As long as the bitcoin price remains above the 21-week moving average, the bullish cycle continues.
Traders and investors should be aware that nothing goes in a straight line. Corrections are healthy and natural for markets and can be used as buying opportunities for mistakes.
The other important thing to keep in mind in this chart is the size of the corrections. During the previous bullish session, there were many rapid 30-40% withdrawals before continuing the bullish cycle.
It should be noted that altcoins can have several disadvantages because they are less liquid and therefore always more volatile than Bitcoin.
Thus, the final correction in the direction of the 21-week moving average can be completed. This indicator is currently close to the previous record high of $ 20,000. However, this is a delayed indicator, and no corrections are made in a week, which means that the 21-week moving average will continue to rally in the meantime.
A possible scenario is a 21-week moving average over several weeks of between $ 24,000 and $ 26,000. This adjustment will also be 30-40%.
Total market value can test a completely earlier height
Weekly graph of total market value. Source: TradingView
The overall market value chart is an excellent chart to look at during adjustments.
Although the probability of a reconsideration of Bitcoin to its full-time high is very small. However, the probability that the total market value will test is a full-time high.
This review will place the 21-week moving average on the overall market value chart around $ 750 billion dollars, an important coincidence with a full-time for 2018. As such, investors and traders should look at $ 750 billion dollars in support. Important for a potential bounce in the cryptocurrency market.