A week ago, the market was in a volatile state as volatility went through the roof, with a steep decline in departments seen across the board. However, this past week was relatively boring and stable as the price of bitcoin (BTC) is now in a narrow range.
This narrow range is confusing to the majority of traders as it is not pointing in any direction for forward movement. Will bitcoin break above $ 11,000 or will the market close the CME gap at $ 9,650? Let’s take a closer look at the charts.
What are the key levels for bitcoin?
The US Dollar is the currency to focus on for now. As the weakness returns to the US dollar, it is expected that other asset classes such as gold, silver and bitcoin will continue their uptrends.
BTC / USD 1-Week Chart. Source: TradingView
A mistake often made by traders and investors in markets: forget to zoom out. It is very important to examine the high time frame to see this big picture, and gauge where the market is currently.
For cryptocurrency and bitcoin, it is looking fast and healthy. But traders should keep an eye on some important levels.
On the upper side, the $ 11,800 area is an important area that could not break in the previous month, as the chart shows.
Therefore, the price of bitcoin returned to the south, making the marked green zone the most important support zone.
If the price of bitcoin is above the green zone between $ 8,850-9,300, then the bullish pattern is valid. If the bitcoin price moves below the green zone, another correction towards $ 7,400 is likely to be rapid.
However, as the market remembers from 2016, a build-up towards a new bull cycle euphoria occurs through long sideways boundaries.
BTC / USD 1-Week Chart. Source: TradingView
Actually, the movement seen in 2016 is very similar to the current price action. A big upside (including a breakout), after which the price of bitcoin goes right and starts rising within a narrow range.
This range is established by the high speed and previous resistance zones. If we compare this to the current price action, the upper range resistance is $ 11,800, and the lower range support is $ 9,200.
If the price of bitcoin consolidates and breaks by $ 11,800, there is a possible target of $ 16,000 on the table.
Improvement in cryptocurrency is seen in total market capitalization
Total Market Capitalization Cryptocurrency 1-Day Chart. Source: TradingView
The total market capitalization of cryptocurrencies is showing a healthy improvement in an upward trending market.
For the first time since June 2019, the total market capitalization created a new high (based on the closing of the candle), indicating a boom. However, many investors expect all upward moves to be similar to the 2017 frenzy.
This is not just the case as a current market structure and looks like the start and build-up of a potential bull run similar to the sensation and momentum of the end of 2016.
This means a slow upward grind, in which previous resistance levels are tested and confirmed as new support areas before rising higher.
In that case, the total market capitalization of crypto is still above the 100-week and 200-week moving average (MA), a significant support below the current market cap.
If there is a support area of $ 270–275 billion in total market capitalization, further continuation is likely. If a new impulse moves, the next resistance and target area can be seen at $ 550 billion.
Levels to watch for bitcoins on daily time frame
XBT / USD 1-Day Chart. Source: TradingView
Daily chart of bitcoin showing exact levels to watch. Conversely, if the price of bitcoin breaks below the $ 10,450 level, the potential and critical axis is structured between $ 10,900–11,000.
If the market wants to move higher, the bitcoin price needs to break below the $ 11,000 level. But if the price of bitcoin is rejected at $ 11,000, the range-bound movement is likely to continue and the possible closure of CME Gap at around $ 9,600.
On the downside, if the bitcoin price falls below $ 10,000, further improvement is towards the critical axis around $ 9,500. This dropdown tests the CME gap at a close and required weekly level.
Nevertheless, such an improvement would still be classified as a healthy return to a better market.
The views and opinions expressed here are entirely one of them Author And do not necessarily reflect the views of Contechlegraph. Every investment and trading step involves risk. You should do your research while making a decision.