The Bitcoin Market Is Trading At A Key Level For The Bulls

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The Fate of Bitcoin’s Bull Market Rests on This One Key Level

Bitcoin (BTC) has been caught within a firm bull market throughout 2020, which has allowed the cryptocurrency to garner some notable momentum that led it to climb from year-to-date lows of $6,800 to highs of $9,200.

Although BTC has struggled to break above the lower-$9,000 region, it is important to note that the cryptocurrency has been able to hold above its key support levels, but bulls need to continue ardently defending these near-term support levels if the crypto is to see any further upwards momentum.

One prominent analyst is now noting that one of these key levels exists at $8,472, and that a daily close beneath this level could mean that the bull market has been invalidated.

Bitcoin Struggles to Gain Momentum After This Weekend’s Drop

At the time of writing, Bitcoin is trading down just under 1% at its current price of $8,640, which marks a slight decline from daily highs of $8,750 that were set yesterday when bulls attempted to catalyze some upwards momentum.

In the near-term, it does appear that BTC’s tight trading range has a lower boundary at $8,500, as this is where the cryptocurrency bounced at on multiple occasions during its latest bout of sideways trading.

Nik Patel, a popular cryptocurrency analyst, shared his thoughts on Bitcoin’s recent price action in a blog post, telling readers that the fate of Bitcoin’s recent bull market may hinge on it holding above $8,472, as a close below this could mean that a bear market will ensue.

“Whether price falls off for the remainder of the week…is uncertain for now, as we have not yet closed below the resistance turned support at $8472 – this level giving way would be my primary indicator that the rally is likely over, at least short-term,” he explained.

What Level Does BTC Need to Break Above to Spark a Further Uptrend?

Patel further goes on to note that the key level Bitcoin needs to break above in order for it to further extend its recent momentum exists at roughly $9,090, which could catalyze a movement to its heavy resistance zone at just below $9,500.

“If, however, we see price begin to retest that $9090 level this week, I expect we may see some further continuation into the heavy resistance zone between it and $9470,” he notes.

Although Patel believes that BTC will face a rejection at this resistance zone, it is imperative that bulls continue absorbing the heavy near-term selling pressure, or else the long-term significance of this rally could be nullified.

Cole Petersen

Cole is a cryptocurrency analyst based in Los Angeles. He studied at the University of California Irvine and has covered bitcoin and the crypto markets since 2020.

The Bitcoin Market Is Trading At A Key Level For The Bulls

The Bitcoin Market Is Breaking Down

The Bitcoin market did not rally from the $9,000 level as expected. On the contrary, the world’s leading cryptocurrency broke through support and looks like it could take another plunge. The token is undergoing an intense round of profit taking that, I think, is lingering HODL’rs leftover from the 2020/2020 rally getting out as quick as they can. I don’t blame them. I too have some positions leftover from that time period that I would like to get out of, the difference is I am content to wait for the big money I know is on the way.

When I say big money I mean at least a retest of the all-time high for Bitcoin and most other major cryptocurrencies. There are a number of catalysts that will drive these highs, the only question is when they will materialize. The one I know for certain is coming and the exact date it will happen is the Bitcoin halvening. The halving is scheduled for May 14 2020 at block number and will greatly reduce the number of available BTCs coming from the mining community.

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If you doubt the power of the halving on BTC prices take a look at this chart, it compares BTC’s performance YTD with that of LTC and ETH. LTC underwent a halving, ETH did not, and it is clear in the chart that LTC outperformed all major markets. Next spring, when BTC halves, there will be a pre-halving rally the likes of which we’ve never seen. Two factors that underscore my point are BTC hash rate and dominance, both of which just hit new all-time highs. This shows more miners are working harder than every before to get a piece of Bitcoin BEFORE the halving. Holders mean supply is limited, increased difficulty means value goes up, the combination equals rally.

Until then, traders are cautioned to avoid overly bullish trades until a clear entry signal is given. Until that happens, traders should be looking for support targets that are the likely targets for the aforementioned entry signals. My targets are $7,800, $6,100, and $5,000. The BTC/USD is currently sitting on $7,800 but price action is bearish. A bear flag is forming so I don’t expect it to hold. A fall below $7,800 is likely to go to $6,100. If I’m wrong and support at this level holds, a move up to retest $9,400 is the most probable scenario.

Bitcoin Trading Near Make-or-Break Levels: Can Bulls Make It?

Bitcoin is currently correcting higher from the $3,906 swing low against the US Dollar. BTC is now forming a crucial breakout pattern, which is likely to decide the next move.

  • Bitcoin price seems to be facing a lot of hurdles on the upside near $5,500 and $5,950.
  • The price is now trading well below $6,500 pivot area and the 100 simple moving average (4-hours).
  • There is a crucial contracting triangle forming with resistance near $5,350 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
  • The pair could either recover towards the $6,500 resistance area or it might start a fresh decline.

Bitcoin is Facing Hurdles

This past week, bitcoin saw a strong decline below the $6,000 and $5,000 levels against the US Dollar. BTC price even spiked below the $4,200 support level and settled well below the 100 simple moving average (4-hours).

A new multi-month low is formed near the $3,906 level and the price is currently correcting higher. It recovered losses and climbed above the $4,500 and $5,000 resistance levels. Besides, there was a break above the 23.6% Fib retracement level of the key drop from the $7,974 high to $3,906 low.

Bitcoin bulls were able to push the price above the $5,500 resistance level. However, the $6,000 resistance area acted as a strong barrier for the bulls. The 50% Fib retracement level of the key drop from the $7,974 high to $3,906 low is also acting as a key resistance.

At the moment, there is a crucial contracting triangle forming with resistance near $5,350 on the 4-hours chart of the BTC/USD pair. If the pair breaks the triangle resistance, it could revisit the $6,000 resistance area.

The main resistance is waiting near the $6,450 and $6,500 levels. There is also a connecting bearish trend line forming with resistance near $6,450 on the same chart.

To start a fresh increase and a convincing recovery, the price must surpass the $6,000 resistance and then gain pace above the $6,500 barrier.

More Downsides?

If bitcoin price fails to climb above $5,500 or $6,000, there is a risk of another bearish break. A clear move below the $5,000 and $4,850 levels is likely to open the doors for more losses.

An initial support is near the $4,200 level, below which the price might retest $4,000. Any further losses could set the pace for a move towards the $3,600 level.

4 hours MACD – The MACD for BTC/USD is about to move back into the bearish zone.

4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is currently just above the 30 level.

Major Support Level – $4,850

Major Resistance Level – $6,000

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a DECADE as a financial.

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