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It is important that the price of Bitcoin exceeds $ 12,000, but don’t expect higher prices before 2021

October 25, 2020

The past week has been a tremendous time for Bitcoin (BTC) investors as the price broke the critical $ 12,000 barrier and climbed from $ 11,300 to $ 13,300, a rebound from $ 2,000 in one week.

A new annual high was set while the dollar also showed weakness. Additionally, several publicly traded companies have issued statements about Bitcoin allocations rather than the US dollar.

All of these arguments speak for a continuation of the bull market, but what levels should one look out for? Let’s take a closer look at the diagrams.

The $ 12,000 barrier was crucial for Bitcoin

It is important that the price of Bitcoin exceeds $ 12,000, but don’t expect higher prices before 2021
It is important that the price of Bitcoin exceeds $ 12,000, but don’t expect higher prices before 2021

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

As Bitcoin’s weekly chart shows, the $ 11,600 to $ 12,000 area was a crucial area to achieve a bullish continuation. This zone of resistance has persisted since the start of the bear market in early 2018. For over thirty months, the price of Bitcoin was only able to break through this resistance zone in the previous week.

The start of a bull market is often marked by nice continuation support / resistance tests which are also at $ 10,000. After this support / resistance test, the bull run continued.

3-day chart of the BTC / USD pair. Source: TradingView

The $ 10,000 level has been retested and held, marking a new support zone. Since then, the price of Bitcoin has continued to rise, causing a breakout above the $ 12,000 mark.

The resistance at USD 11,600 needs to be changed to support

3-day chart of the BTC / USD pair. Source: TradingView

With a surge of $ 11,600 to $ 12,000, it can now pinpoint some interesting levels for traders to watch over the coming weeks. Often, Buying after such a big rally is not the best strategy as the lower levels will likely be retested.

As mentioned earlier, confirming a change in support / resistance around the USD 10,000 level guaranteed upward momentum. A similar case should arise here. The critical $ 11,600 to $ 12,000 barrier is likely to undergo a support level test before the market can recover any further.

The resistances are at $ 13,600 to $ 14,000 and $ 16,500 to $ 17,000. The latter, however, is unlikely to be affected in the coming months, as movements within the range seem more likely.

As such, traders should watch out for the $ 13,600-14,000 and $ 11,600-12,000 areas, as both could become pivotal hubs in the coming weeks.

The total market cap for crypto is entering the key zone of resistance

3-day graph of the total capitalization of cryptocurrencies. Source: TradingView

The total market capitalization chart for all cryptocurrencies shows a clear resistance zone between $ 395 billion and $ 415 billion. A one-time breakout is unlikely, but largely depends on the movement of Bitcoin.

So, Retesting the $ 330-340 billion support would be very likely and would provide a healthy build up for a new bull market to start.

When total market cap exceeds $ 395 billion to $ 415 billion, the next resistance zone is between $ 510 billion and $ 525 billion.

One possible scenario for the price of Bitcoin

3-day chart of the BTC / USDT pair. Source: TradingView

As explained earlier in this article, it is very likely that Bitcoin price has corrected towards the $ 11,600-12,000 range for some technical-level testing.

Therefore, a technical structure with a limited range can be determined. The resistance zone is between $ 13,500 and $ 14,000 and the support zone is between $ 11,600 and $ 12,000.

This limited range build is very healthy to start a new cycle as it is constantly building to a higher level. If you get out of this sideways area after a few months, you will see the next big step that will likely bring the price of Bitcoin to $ 17,000 and possibly even a new all-time high.

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.