Bitcoin Bounces Off Consolidation Range, What Lies In Store?
Bitcoin has been on a steady increase over the last two weeks. It has not been on the uptrend for all of this time, but the majority of the time, the digital asset has maintained this upward trajectory. This has seen it touch above $24,000 at one point after bouncing off its strong consolidation point. Now, as the digital asset trails $23,000, a couple of technical levels have begun to form beneath it.
Bitcoin Begins To Form Support
Bitcoin has broken above $23,000 once more, and support has begun to form. After previously 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 would need to break some important technical levels. The first would be the $25,000 range, where the most resistance is currently being mounted. A widespread accumulation trend would be the only likely fuel to break through this level. After which, the nearest resistance would be formed at $28,000 due to it being the lowest point for the 2021 cycle.
BTC continues recovery trend | Source: BTCUSD on TradingView.com
On the other side of this, the digital asset still has some potential to fall back down. This would put it in the direct path of the $21,000 support, but this is unlikely to hold for the long term. The next significant support level would fall to $19,700, which represents the peak of the 2018 bull cycle. Hence, the support put up here would be strengthened compared to that at $19,000. But if this fails to hold, $17,600 would present to be the next important level due to being the current cycle low.
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For now, as bitcoin climbs up, it is still expected to meet resistance at $24,000, which was the point it failed to beat last week. This makes it the most immediate threat for bulls in the quest to retake $30,000. This point determines if bitcoin would be able to break above the 50-day moving average, which would determine a bearish or bullish trend for the short term.
Sell-offs remain the major thing that is pulling back the value of bitcoin, though. While the short term is beginning to turn in favor of buy, the long-term outlook still poses a sell for investors. These sell-offs, which are yet to reach a fatigue point, are most likely the culprit behind bitcoin’s inability to breach $24,000 successfully.
Featured image from The Financial Express, chart from TradingView.com
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