Bitcoin is still trading within the lower range between its major support and resistance levels between $30,000 and $40,000. This range is marked by the thick blue lines on the chart.
As mentioned in earlier analysis, this looks like an accumulation range. It is that price area where many institutions entered the market, being somewhat influenced by the decisions and tweets of Elon Musk.
This accumulation range has now been active for almost two months and it is likely break these Support / Resistance levels very soon. Some speculate that the price will go further south well below $28,000.
Personally, I think the price will shoot up, break the upper resistance level and reach around $45,000 before a bullish pullback to the $40,000 zone. Here is why.
If we measure the Fibonacci retracement levels of the strong bearish momentum from $60,000 to $29,000 we can see that the 50% of that momentum hovers around $45,000.
If the momentum is stronger, the price might even go up to $48,000 which is at the 0.618 Fibonacci level.
However, I think it is more likely that when the Resistance level is broken at around $41,000 (upper blue line) the price will go to around $45,000 than retrace back to the resistance which will become support and then reach the $48,000 with the following bull run.
But for now, all we can do is wait until the current trading range gets broken to the upside. A daily close at $42,500 would confirm the breakout.
The 1-Hour chart shows great promise of a bullish momentum which can signal a possible reawakening of a sleepy giant. The price action has crossed the 200 MA to the upside, pulled back and shot up with a big bullish candle. The volume is also quite high.
We can see that the 21 MA crossed the 200 MA and it also looks like the 50 MA will soon cross the 200 MA to the upside as well. These are all good signs of a bullish trend being formed, at least in the short term.
For a confirmation of a longer and more sustainable bullish trend, we need to wait until the price crosses $42,500. Although it may seem like a big price increase, in terms of historical Bitcoin volatility it’s not that much.
The above analysis is only an opinion. The price could fall on some negative news and the temporary bearish momentum could be extended.
One thing is a given, this week should be very interesting for Bitcoin traders.