The price of Bitcoin (BTC), the top-ranked cryptocurrency by market cap, has ranged from $ 8,600 to $ 10,500 from half. During the two-month side action, the market began to heat up and alternative currencies came into the spotlight.
Furthermore, traders and investors constantly debate whether the BTC price is still in bullish or bearish territory. Let’s take a closer look at the charts where Bitcoin will be headed next.
Crypto market daily performance. Source: Coin360
Bitcoin needs to hold support above crucial $ 8,600 level
Bitcoin’s price is at a critical level to stay up in the $ 8,550-8,750 area.
BTC / USD 1-day chart. Source: TradingView
Bitcoin has been in a significant uptrend since the heavy crash in March. As an uptrend is ranked through highest highs and highest lows, the recent low is in the $ 8,550-8,750 area.
This is an important area because traders use these pivots for setting stop / loss levels. But since Bitcoin’s price has slowly receded and consolidated, the focus should be on volume.
During the consolidation period, the volume decreased steadily. This is an indication that we are not in the “movement”, which would mean a new trend. This move would be confirmed by a big break above $ 10,500 or a big break below $ 8,500.
An example is seen in the consolidation period of around $ 3,500-4,000 eighteen months ago.
A great movement is on the horizon
In the first quarter of 2019, the price of Bitcoin moved within a narrow range.
BTC / USD 1-day chart. Source: TradingView
This is significant because it shows what generally happens during a long lateral period and why the current stage is also classified as one.
During the 2019 range limit period, the volume drained over time. The real climax of volume came with the breakout, which meant that the breakout traders reached their limit purchases and the shorter ones reached their stop / loss.
This chain reaction triggered a sudden $ 1,000 candle. Since the price has been hovering around the range for months, the breakout is usually significant and explosive. The more something extends in a certain period of accumulation, the greater the movement once it explodes.
This exact example can be seen with many alternative currencies, as some of them have been floating in an accumulation range. An example of this is Zilliqa (ZIL), which went out of range and increased 1,000% since then.
Crucial levels in smaller time frames for Bitcoin
The crucial levels in smaller terms are essentially the support between $ 8,800-9,000 and the resistance at $ 9,300. The latter is more important since an advance at the $ 9,300 level would indicate a further upward continuation.
BTC / USD 4-hour chart. Source: TradingView
The 4-hour chart shows a clear structure of limited range. Support is between $ 8,900-9,000, which must be maintained for bulls. As long as that support remains support, a new test of the resistance zone is on the table.
In general, the more often a level is tested, the weaker it becomes. Therefore, a renewed test of resistance at the $ 9,300 level could lead to a significant breakout, as it would place Bitcoin back within the previous range.
In other words, the chances of further disadvantage decrease if $ 9,300 is claimed.
Total market capitalization support greater than 100 days and 200 days MA
1-day chart of the total market capitalization cryptocurrency. Source: TradingView
The total market capitalization of the cryptocurrency market also maintains the previous low as support.
More significantly, the total capitalization of the cryptocurrency market remains above the 100-day and 200-day moving averages (MA). As long as these hold, the market capitalization is in bullish territory.
This is because this is an important indicator of bull / bear momentum. The 100 and 200-day MAs have been serving as a support throughout the previous cryptocurrency market cycle.
With these levels likely to support, a break above $ 260 billion is becoming increasingly likely. Regaining the $ 260 billion level would also add fuel for further momentum towards new highs.
The bullish scenario for Bitcoin
BTC / USD 4-hour bullish scenario chart. Source: TradingView
The bullish scenario has some crucial points. First of all, the $ 8,900-9,000 support has to be maintained. If this support is lost, BTC / USD will likely drop below $ 8,550-8,750 in bearish territory.
Second, the key resistance at $ 9,300 has to break for a possible rally towards $ 9,650. Since this level has not been tested, it would be the first pivot point for further hike. This previous resistance of $ 9,300 has to change to get support for a higher move.
However, as long as the price of Bitcoin remains below $ 10,500, the volume of the move is expected to be small. A big breakout would occur if the $ 10,000-10,500 resistance zone was finally conquered as too many triggers would fire.
It wouldn’t be a surprise to see a rapid rise in a few hours to the next major resistance zone at $ 11,600.
The bearish scenario for Bitcoin
4-hour bearish scenario chart BTC / USD. Source: TradingView
The bearish scenario is also heavily dependent on the $ 9,300 level. If that level is rejected again, a further test of support of $ 8,800-8,900 should be expected and the weaker this support is, the greater the chances of further downside.
With $ 9,300 as resistance, a new test of $ 8,800-8,900 would likely result in another dip. Going below the $ 8,600 level could also see a high volume drop because this means that the range for the past two months would be lost.
If Bitcoin’s price drops below $ 8,600, I expect a quick drop towards $ 7,400-7,700 without many opportunities for shorts. Maintaining current support and 1-day support levels would mean the market is still in good shape.
The views and opinions expressed here are solely those of the author and do not necessarily reflect Cointelegraph’s views. Every investment and commercial movement involves risk. You must do your own research when making a decision.
