Bitcoin Bounces Off Consolidation Area, What’s Next?
Bitcoin has been on a steady rise for the past two weeks. It has not been in an upward trend all this time, but most of the time the digital asset has maintained this upward trajectory. This has seen it reach above $24,000 at one point after returning the strong consolidation point. Now, as the digital asset trails $23,000, a couple of technical levels have started to form below it.
Bitcoin is starting to form support
Bitcoin has broken above $23,000 again and support has started to form. After earlier losing its footing and falling to $21,000, the digital asset had seen support pushed down to $19,000, but this would change soon after. As bitcoin continues its uptrend, it is now looking at support at $21,000, much stronger than previously established.
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However, for the digital asset to continue on this bull rally, it needs to break some key technical levels. The first will be the $25,000 series, where the most resistance is currently mounted. A widespread accumulation trend would be the only likely fuel to break through this level. Next, the closest resistance will form at $28,000 due to it being the low point of the 2021 cycle.
BTC continues recovery trend | Source: BTCUSD on TradingView.com
On the other side of this, the digital resource still has a certain potential to fall back down. This would put it in the direct path of the $21,000 support, but this is unlikely to hold in the long term. The next significant support level will fall to $19,700, which represents the peak of the bull cycle in 2018. Therefore, the support set up here will be strengthened compared to the one at $19,000. However, if this does not hold, $17,600 will be the next important level due to of the current cycle being low.
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For now, while bitcoin is climbing higher, it is still expected to face resistance at $24,000, which was the point it failed to hit last week. This makes it the most immediate threat for bulls looking to recapture $30,000. This point determines whether bitcoin will be able to break above the 50-day moving average, which will determine a bearish or bullish trend in the short term term.
Sales are still the main thing that drags the value of bitcoin back. While short-termism is starting to turn in favor of buying, the long-term outlook remains a sell for investors. These sales, which have not yet reached a point of exhaustion, are most likely the reason behind bitcoin’s inability to successfully breach $24,000.
Featured image from The Financial Express, chart from TradingView.com
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