The price of Bitcoin may now suffer a side action for a few months after overcoming a resistance of several years in US$ 12,000.
Bitcoin’s winning $12,000 is important, but don’t expect higher prices before 2021.
Price analysis
The previous week was tremendous for Bitcoin (BTC) investors, as the price broke the crucial $12,000 barrier, culminating in an increase from $11,300 to $13,300, a high of $2,000 in one week.
A new annual high was recorded, while the dollar has also shown weakness. In addition, several listed companies came with statements on Bitcoin allocations instead of the US dollar.
All these arguments point to the continuation of the high market, but which levels should be observed? Let’s take a closer look at the charts.
The US$ 12,000 barrier was crucial for Bitcoin
As the Bitcoin weekly chart shows, the $11,600-12,000 area was a crucial area to break for any bullish continuation. This area of resistance has been persistent since the beginning of the bearish market in early 2018. For more than thirty months, the price of Bitcoin was unable to break this resistance zone until last week.
The onset of a bullish market is often signaled by beautiful support/resistance tests for continuation, which are also seen at the $10,000 level. After this support/resistance test, the race upwards continued.
The $10,000 level had a new test and was maintained, which marked a new support zone. Since then, the price of Bitcoin has continued to rise, leading to an escape above the $12,000 barrier.
The $11,600 resistance should turn into support
As the $11,600-12,000 has gone up, some interesting levels can now be determined for traders to watch in the coming weeks. Often, buying after such a high is not the best strategy, as a new test of lower levels is likely.
As mentioned, the confirmation of a support/resistance turnaround at the $10,000 level has guaranteed a bullish momentum. A similar case is likely here. The crucial $11,600-12,000 barrier is likely to be tested at the support level before the market can continue to recover.
Resistance is found at $13,600-14,000 and $16,500-17,000. However, the latter is unlikely to be achieved in the coming months, as movements within range appear more likely.
Therefore, traders should pay attention to the $13,600-14,000 and $11,600-12,000 area, as both could become crucial supports in the coming weeks.
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Crypto market capitalization enters the key’s resistance zone
The total market capitalization chart for all cryptomaps is showing a clear resistance zone between $395-415 billion. It is unlikely that there will be a breakout at once, but that depends very much on Bitcoin’s movement.
Therefore, a new $330-340 billion test for support would be very likely and would set up a healthy construction for the start of a new bullish market.
If total market capitalization exceeds $395-415 billion, the next resistance zone will be found between $510-525 billion.
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Possible scenario for Bitcoin
As discussed earlier in this article, there is a very likely case that the price of Bitcoin will have a correction for the area of $11,600-12,000 for some technical level tests.
Therefore, a technical structure limited in scope can be determined. The resistance zone is located between US$ 13,500-14,000 and the support zone is between US$ 11,600-12,000.
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This limited construction is very healthy to start a new cycle, as it is constantly accumulating at a higher level. Breaking this side strip after a few months may occur the next big movement, which will probably take the price of Bitcoin to $ 17,000 and possibly even a new historical record.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of the Cointelegraph. Every investment and trading movement involves risk. You should conduct your own research when making a decision.