Bitcoin's Price Above $18,000 as Key Market Levels are Tested
Bitcoin's price is appearing to rebound as it stays above the important $18,000 support level. The cryptocurrency's mid-term future could be determined in the next few days, as key market levels are currently being tested.
Bitcoin's price is showing signs of recovery as it holds well above the significant $18K support level. The mid-term future of the cryptocurrency- price-wise - could be decided in the next few days, as the market is currently testing key levels. The market is currently testing the $18,000 level as a key support level. A break below this level could signal further downside in the price of bitcoin.
Technical analysis can help you spot trends and make better investment decisions.
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The Daily Chart: Your One-Stop Shop for Data Visualization
It is positive to see that the $18K support level is continuing to prevent the cryptocurrency from making new lower lows. The market has once again rebounded from this level and is now breaking above the significant bearish trendline of around $19K. This is a positive development and suggests that the market may be ready to start moving higher again.
The market for cryptocurrencies remains highly dynamic, with prices moving up and down rapidly. However, there are some key levels that investors are watching closely. The 50-day and 100-day moving average lines are currently acting as resistance levels, meaning that the price needs to move beyond them in order for the chart to turn bullish in the short term. If there is a breakout, the $24,000 resistance level would be the next target. The price reaction at that level would likely determine the mid-term outline of the cryptocurrency market.
There is always the possibility of a fake breakout above the trendline. This could result in the formation of a bull trap, as witnessed on several occasions over recent months. However, savvy investors will be able to recognize these traps and avoid them.
A breakout and retest of the mentioned trendline and moving averages would be essential for a more reliable bullish trend. This would provide more confidence to investors that the market is indeed heading in an upward direction.
The 4-Hour Chart: How to Make the Most of Your Time
It seems that the price of Bitcoin is stuck in a bit of a rut at the moment, oscillating between the $18,000 and $20,000 levels. The $20,000 mark is proving to be a bit of a resistance level, with the price having difficulty pushing through it.
There is a possibility for a bullish breakout, with the $23K level as the next likely destination. However, considering that the RSI indicator is entering the over-bought zone above 70, there is also a likelihood for a fake breakout and a bull trap to occur. These events could play out similarly to what is seen on the daily timeframe.
It is important to monitor both the price action and the RSI closely in the coming days in order to identify whether a bearish divergence will form or if a valid breakout above the $20K level could be the outcome.
Onchain Analysis: The Future of Blockchain
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It is hard to say what the rest of 2021 will bring for the financial markets. There have been a couple of very unstable periods already, and it is possible that we will see more of the same. Inflation and geopolitical unrest are both major factors that could continue to impact the markets in a negative way. However, it is also possible that things will stabilize and we will see more positive growth.
The chart below illustrates Bitcoin's supply dynamics based on the Realized Cap - UTXO Age Bands (%) metric. This particular metric unifies coin groups based on their lifespan and their share of the total realized cap. From the chart, it is evident that the vast majority of Bitcoin that is in circulation has been held for quite some time.
The surge in these age bands suggests accumulation among long-term holders. Contrarily, the reduction indicates selling pressure and distribution behavior. This data is important for understanding the current state of the market and predicting future trends.
The market is currently in a stage of heavy accumulation, with the number of coins that have moved in the last six months steadily increasing. This is a good time to invest in cryptocurrency, as the market is still relatively young and has a lot of room to grow.
It's been a wild ride for Bitcoin over the past few weeks. After testing the $20,000 mark, buyers have been attempting to build momentum. However, some analysts are warning that this could be another "bull trap" - a false sense of optimism that leads to a sharp price drop.
