Last week’s candle closed 22% lower. This caused a lot of fear in the cryptocurrency market. Should we be cautious now, or will history repeat itself and are moments of uncertainty and fear the best buying opportunities?
No one dares to say for sure. Therefore, we remain neutral in this analysis. We focus on the supports and resistances that Bitcoin will face in the coming weeks. The central question for today is: which way is the price going and which levels are important?
What is Bitcoin Resistance?
As I’ve mentioned several times, Caixa Verde has been a hugely important pillar in recent months. Price tested support a few times and it worked perfectly for almost 150 days. Until a big red candle appeared that had no support. A major support that the price drops through is often a major resistance in the future. So the box in the image below is now colored red.
If the price goes up, Bitcoin will certainly face great resistance from this box. Resuming this level as support will not be an easy task. If the price quickly breaks through this and acts as support again, the next resistance will be around $20,000. Such a move can take weeks or even months. However, this could herald the beginning of new highs.
At the moment, however, we see no reason for a significant upward movement. Therefore, we should definitely pay attention to the supports.
Which supports are important?
Bitcoin is still in a downtrend, so new lows are always a possibility. To see the important supports, we have to zoom out a bit. The price action of a few years ago is of great importance here.
The $13,800 level is a very important support. This level is often mentioned when defining a bottom for Bitcoin. A few good raises from this box are the least we can expect. Of course, it is always possible that negative events in the crypto market will increase fear and further push the price down. In this case it is important to keep the bottom square in the table above.
However, the price is still far from these levels. To get the first major support, the price needs to drop a little less than 20%. And the box below should make you think about a 40% drop. Notably, the $10,500 mark is still miles away, so it’s quite possible that the price will never reach that mark again. Still, it’s good to know that major supports are ahead if the downtrend continues.
Source: Btc Direct
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Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
