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Bitcoin price can reach $ 16,000, but only if that level of resistance is exceeded at any point

September 12, 2020

A week ago the market was on shaky ground as volatility spiked across the board with massive declines in portfolios.. However, the past week has been relatively boring and stable as the price of Bitcoin (BTC) is now in a tight range.

This narrow range confuses most traders as it does not point in one direction for any further momentum. Will Bitcoin break above USD 11,000 again or will the markets close the CME gap at USD 9,650? Let’s take a closer look at the diagrams.

What are the critical levels for Bitcoin?

The US dollar is the currency that you need to focus on right now. When the weakness returns to the US dollar Other asset classes like gold, silver and bitcoin are likely to continue their uptrend.

Bitcoin price can reach $ 16,000, but only if that level of resistance is exceeded at any pointBitcoin price can reach $ 16,000, but only if that level of resistance is exceeded at any point

BTC / USD 1 week chart

1-week chart of the BTC / USD pair. Source: TradingView

A mistake traders and investors often make in the markets: forgetting the historical perspective. It is very important to check the higher time frames to see this bigger picture and assess where the market is currently at.

It looks bullish and healthy for cryptocurrencies and bitcoin. However, traders should look out for a few key levels.

At the top, the $ 11,800 area is a crucial area that didn’t break out in the previous month as the graph shows.

So, Bitcoin price moved back south, making the highlighted green zone the main support zone for now.

If Bitcoin price maintains support above the green area between $ 8,850 and $ 9,300, the bullish structure will still apply. If Bitcoin’s price falls below the green zone, a further correction towards USD 7,400 is increasingly likely.

However, as the market remembers from 2016 onwards, a new cycle of bullish euphoria is building up over long sideways ranges.

BTC / USD 1 week chart

1-week chart of the BTC / USD pair. Source: TradingView

In fact, the movements observed in 2016 are very similar to the current price movement. A major upward rally (including a breakout) after which the price of Bitcoin corrects and begins to move in an increasingly narrow range.

This area is determined by the top of the movement and the previous resistance zone. If we compare that to the current price action, the resistance in the upper area is $ 11,800 and the support in the lower area is $ 9,200.

If the price of Bitcoin consolidates and is above $ 11,800, a potential target of $ 16,000 is within the possibilities.

The total market capitalization of cryptocurrencies is significantly corrected

Cryptocurrency with total market capitalization 1-day chart

1-day chart of the total market capitalization of cryptocurrencies. Source: TradingView

The total market capitalization of cryptocurrencies shows a healthy correction in an uptrend market.

For the first time since June 2019, total market cap created a new higher high (based on the candlestick close), which is a bullish signal. However, many investors expect all upward trends to resemble the 2017 mania.

This is simply not the case as the current market structure looks the same as the beginning and building of a potential bull run that is similar to the sentiment and momentum of late 2016.

This means a slowly ascending routine where previous levels of resistance are tested and confirmed as new support areas prior to the ascent.

In this case, the total market capitalization of cryptocurrencies remains above the 100 and 200 week moving averages (MA), with the key support being below current market capitalization.

If total market cap has support ranges of $ 270 billion to $ 275 billion, it will likely keep rising. When a new momentum move occurs, the next target and resistance zone will be at $ 550 billion.

Levels to watch out for in the daily time frame for Bitcoin

XBT / USD 1-day chart

XBT / USD 1-day chart. Source: TradingView

Bitcoin’s daily chart shows precise values ​​to be observed. On the positive side, if the price of Bitcoin is above the $ 10,450 level, the potential and critical pivot is between $ 10,900 and $ 11,000.

If the market is to move higher, the price of Bitcoin must fall above the $ 11,000 level. However, if Bitcoin price drops to $ 11,000, it is very likely that it will continue to take limited-range moves and potentially close the CME gap at around $ 9,600.

If Bitcoin price drops below $ 10,000, further corrections will likely be made towards the crucial pivot of around $ 9,500. This drop-down menu guarantees a CME gap closure and a weekly test of the essential level.

However, such a correction would still be classified as a healthy pullback in an uptrend market.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement involves risk. You should do your own research when making a decision.

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