Bitcoin’s price has shown significant strength as the price rebounded more than 60% in six weeksfrom $ 10,000 to $ 16,500, leaving many investors behind.
These investors waited for the CME gap to close at $ 9,600, but it didn’t. But still, Can the markets expect a correction or should the markets continue to strengthen?
Bitcoin releases the sixth consecutive green weekly candle
The daily chart shows some key levels to watch. If Bitcoin’s Price Wants To Continue Its Upward Momentum, Previous resistance zone needs to be changed to get support.
A similar example shows the previous breakout at $ 13,200. This area acted as resistance before the breakoutbut it immediately changed to become a new support. This change in support / resistance guaranteed another continuation at $ 16,500.
The $ 15,500 to $ 15,700 range includes the same critical construction as the $ 13,200 range above. Maintaining the $ 15,500 to $ 15,700 range means the increase is likely to continue to growwhile a breakout confirms bearish divergence, which should push the price down. This bearish move could even cause BTC to drop to the $ 14,000 level.
A correction to USD 12,000 is still possible
The weekly timeframe shows an accurate resistance level of $ 12,000 that was broken six weeks ago. The next massive resistance zone is between $ 15,750 and $ 16,500. that was achieved last week.
But is it likely to continue after such a massive surge? One argument is that there are still many untested levels below the current spot price at which liquidity can be found.
Additionally, sentiment has turned from bearish to euphoric optimistic as more and more institutions get on the Bitcoin train. So a relapse should come as no surprise.
As the graphic shows A correction towards USD 12,000 could still take placewhat used to be a critical level. This level was broken after a two-year holding period. However, this area was not retested.
Investors and traders should view this level as a potential entry of interest.
The Fear Greed Index says the market is overheating
The Crypto Fear Greed Index measures various variables to measure current market sentiment, which is still 90 out of 100. This level is classified as “extreme greed”.
This level has only been reached once so far. This previous one marked the height of the bullfighting in June 2019.
Of course, it is not a completely reliable indicator, and traders and investors should not blindly anticipate their strategy based on this indicator. However, it does provide useful information on the current state of euphoria in the market.
Since FOMO (abbreviation in English for Afraid of missing out or “fear of missing out”) calms down, Correction would get everyone back on their feet. As mentioned earlier, such a withdrawal would be very healthy for an overheated market.
Levels to be displayed in lower time frames
The four hour chart is showing a clear uptrend from the breakout at USD 10,000. However, there are some critical levels that need to be maintained in order to maintain this momentum.
The red box indicates the liquidity above the recent high. To keep gaining weight An obvious break should occur in this resistance zone, where the USD 16,500 area is instantly turning to support. If not, the breakout will most likely become a trap and just an indication of liquidity before the market reverses.
As explained above, the $ 15,600-15,750 range must be held to follow the uptrend.with the next significant area of resistance at around $ 17,500. If this area is not serving as support, the next support zone is between $ 14,800 and $ 15,000. Possible bearish support / resistance reversal of the $ 15,600-15,800 area is likely to trigger another bearish trend.
When that happens, The next areas of support are expected to be $ 13,700 to $ 13,900 and $ 12,800 to $ 13,200.
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.