Bitcoin price has lost its exciting volatility again as now it’s trading in a narrowing range, so taking out a key resistance level is priority number-one for the bitcoin bulls.
A week ago, everyone had an eye on the market as the volatility went through the roof with massive drops in portfolios seen across the board. However, this past week was really stable and the price of Bitcoin is in a narrow range and must break the resistance level.
This range is confusing most of traders as it is not hinting at any direction for further momentum. Will Bitcoin break back above $11,000 or will the markets close the CME gap at $9,650? Let’s analyze charts.
Crucial levels for Bitcoin
The U.S. Dollar is what we should focus on right now. As weakness returns to the U.S. dollar, it’s likely to expect that other asset classes like gold and cryptocurrency continue their uptrend.
A common mistake by traders and investors in the markets is forgetting to zoom out. It’s essential to check higher time frames to see this bigger picture, and gauge where the market is standing now.
For cryptocurrencies and Bitcoin, it seems bullish and healthy. But traders should keep an eye on some crucial levels.
On the upper side, the $11,800 is a crucial area that couldn’t be broken in the last month. Therefore, Bitcoin retraced south, making the marked green zone as the most important support zone right now.
If the price of Bitcoin sustains support above the green area between $8,850-9,300, the bullish structure becomes valid. If the price of Bitcoin drops below the green zone, a further correction towards $7,400 becomes likely.
However, as what the market had seen in 2016, a build-up toward a new bull cycle euphoria happens via long sideways ranges.
Indeed, the movements in 2016 are very similar to the current price action. One big surge upward, after which the price of Bitcoin corrects and starts to move inside a narrowing range.
This range is established by the high of the move and the previous bitcoin resistance level. If we compare it to recent actions, the upper range resistance is $11,800, and the lower range support is $9,200.
If the price of Bitcoin consolidates and breaks through $11,800, a potential target of $16,000 is accessible.