Bitcoin continues to thrive and its price is constantly reaching new highs. Yesterday, the price rose to $38,000, a price level that Bitcoin has not seen since May 2022. Euphoria is clearly returning to the market and predictions of a $40,000 or even $50,000 Bitcoin are all over Twitter.
However, it is important to remember that this is often the first reaction of investors after such a big rally: the tendency to think that the sky is the limit and that the sky is the limit. Although it looks attractive, it is mainly emotional. In these times it is important to keep a cool head and take profits, especially as Bitcoin approaches major resistance on the weekly chart.
Bitcoin encounters resistance
The largest cryptocurrency has been in the green for four weeks in a row. Whether there will be a fifth doesn’t matter at this point. Because let’s be real: we are experiencing strong resistance around this price level. For example, we have already seen this when the price reached $38,000. Within minutes the price dropped by $2,000. If Bitcoin closes the weekly candle in the red box, there is a good chance that we will enter a correction or downward move next week.
If the price starts to correct, I will keep an eye on the $32,000 price level. This level has been resistance on the weekly chart for months, but has yet to be retested as support after the price peaked above it.
The short-term chart
Another short term chart for those interested. The image below shows the 30 minute period, meaning each candle represents a 30 minute period.
Bitcoin hits higher highs and higher lows on this chart, causing the price to plummet. This pattern is also called a rising wedge and usually has a negative price target. The reason the price is likely correcting on this chart has not only to do with the pattern, but also with the declining volume. As the price increases, the volume continues to decrease. This indicates a lack of buyers and is often an indication that the trend is reversing.
Source: BtcDirect
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
