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Bitcoin Reaches Multiple Key Resistance Levels; Will They Spark a Selloff?

Published

2 Monaten ago

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  • Bitcoin’s price has reached multiple key levels as a result of its latest push higher
  • This rally came about rather unexpectedly overnight and drove many altcoins to see immense losses
  • This is one of the rare days where Bitcoin is trading up significantly while altcoins all reel lower
  • It remains unclear as to whether or not this will be the new norm for the next few weeks or if today’s price action is simply a fluke
  • The coming few days and weeks should provide insight into this trend
  • One analyst is noting that Bitcoin may also face some heightened selling pressure in the near-term due to multiple heavy resistance levels

Bitcoin has been leading the crypto market higher throughout the past few days, with its recent break out of its consolidation phase, acting as a launchpad for the entire market.

This trend has come to an end today, however, as BTC’s latest rally has sucked the air out of altcoins, causing many of them to post major losses as the benchmark cryptocurrency rallies higher.

How BTC trends in the coming few days should provide some serious insights into how long this trend will persist.

One trader is noting that he expects Bitcoin’s momentum to slow down in the near-term, as it has now reached multiple heavy resistance levels.

Bitcoin Pushes Towards $12,000 in Unexpected Overnight Movement 

At the time of writing, Bitcoin is trading up over 1% at its current price of $11,880.

The cryptocurrency’s latest move higher came about rather unexpectedly and appears to have been fueled by an exodus away from altcoins.

Many investors are growing fearful that BTC will continue climbing at the expense of smaller beta assets. However, it is still a strong possibility that today’s move is simply an outlier and not emblematic of a new trend.

Analyst: BTC Reaches Multiple Key Resistance Levels Following Upsurge 

One analyst said that Bitcoin is likely to slow its ascent here, as it has now reached multiple key resistance levels.

He notes that he will either wait for a retrace, or a break above these levels, before adding to his positions.

“Took some profits on BTC at diagonal and horizontal resistance. Looking to add some back lower or on a close above diag/horizontal,” he said while pointing to the below chart.

Image Courtesy of Pentoshi. Source: BTCUSD on TradingView.

How Bitcoin trends throughout the coming day and coming week should offer altcoin investors serious insights into the market’s outlook.

Featured image from Unsplash.
Charts from TradingView.





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Bitcoin

‘Bullish year ahead’ — Bitcoin primed for Q1 2021 gains, strength index suggests

Published

18 Minuten ago

on

Dezember 29, 2020

By


The monthly relative strength index (RSI) of Bitcoin (BTC) shows the dominant cryptocurrency is primed for another rally.

Is 2021 an ideal time for a Bitcoin rally?

The RSI is a momentum indicator that measures whether an asset is overbought or oversold. When the RSI surpasses 75, it signals the asset is overbought, and when it drops below 30, it means the asset is oversold.

A pseudonymous trader known as “Crypto Capo” noted that the monthly RSI of Bitcoin is set to close above 80. Historically, when this has happened, BTC has saw a strong rally afterward.

Although the monthly RSI of Bitcoin is above 80, which is technically oversold, BTC’s RSI tends to become oversold for prolonged periods during a bull cycle.

The monthly RSI of Bitcoin. Source: Crypto Capo

Hence, traders often refer to an oversold RSI on a high time frame chart, like the monthly candle chart, to forecast an extended rally in the short term to medium term. The trader said:

“Monthly candle is about to close above 80. When this happens, bullish trend continues, with an avg. return of 1010.87%. Each cycle is shorter.”

However, the trader emphasized that one indicator cannot accurately predict the price cycle of Bitcoin. Crypto Capo explained that the combination of a few indicators could serve as guidance for the future. He wrote:

“You cannot base a prediction on an indicator. What we do is combining several methods to have a guideline for the future, to see what is more likely. But in the end, we adapt to what the price does in the present.”

“Bullish year ahead”

Traders have differing perspectives on where Bitcoin is headed in 2021, but most traders remain overwhelmingly bullish.

Cointelegraph Markets analyst Michael van de Poppe said he anticipates Bitcoin to reach $65,000 to $85,000 by next year’s end. He stated:

“I’ve got to revise my view on the potential level of $BTC at the end of 2021. Through this recent surge, I’m expecting it to be between $65,000-85,000 at the end of 2021. Bullish year ahead.”

Meanwhile, the options market is pricing in a 22% chance of Bitcoin achieving $120,000 by next year, which could also serve as a potential guideline on where BTC is heading in 2021.

In the short-term, however, some traders are cautious in entering leveraged positions. A pseudonymous trader known as “TheBoot” said the ideal scenario is to wait for Bitcoin to consolidate at $25,000 or enter after the next price upsurge. The trader explained:

“No rush to enter leveraged trades on $btc right here imo. Best would be to wait and long low 25k or even mid 24k. Alternatively, wait for the next leg up and then a dip from there.”

Cointelegraph previously reported that whales have been buying Bitcoin more aggressively since Christmas, which could buoy the mid-term bull case for BTC entering into 2021.