Bitcoin regains bullish momentum and $20,000 reappears in the visibility area
In the local weekend rally, the BTC price overcame an important resistance.
Bitcoin remains in the spotlight as companies add it to their portfolio one by one. MassMutual was the last company to report such a $100 million addition to its portfolio today. This adds to the impressive buying pressure, renewing hopes for a breakdown of $20,000 back in December.
Following the week’s correction, the Bitcoin price has bounced above its critical level of $18,600 and is likely to aim for new highs. However, as the Bitcoin System breakthrough occurred over the weekend, one of the problems for the bulls is the relatively low trading volume of the bounce.
The 4-hour schedule shows everything you need to know about Bitcoin’s movements in recent days. Originally, the BTC broke through the critical support area at $18,500 and fell to the next support at $17,600.
This support worked out with a bullish divergence at the RSI. The bearish momentum was not enough to provoke a break-down below $17.600 when buyers entered this level.
The decisive local resistance was then at $18,500 and it was quickly broken through within a few hours. This movement also led to a significant rally towards the resistance zone at record price highs of $19,500.
Is Bitcoin going to replicate the same pattern again?
The view from the height of the day’s timeframe gives an idea of increasing ranges after a pulsed upward movement. The price of Bitcoin has increased several times in the last year. The first impulse movement occurred before halving, the second in August and the last in the last few months.
However, after each such movement, the price has been trading in a relatively narrow range for some time, as the market needs to accumulate enough momentum to continue the trend. Nothing is rising in a straight line and retests of previous resistance levels must periodically take place to continue the trend.
There was a false break-up in each of the last periods, setting the basis for the upper limit of the uptrend wedge. The probability of a similar development is also increasing this time, given the price movements this weekend.
From this point of view, the prospect of movement to $21,000 is again becoming relevant, which should lead to the circulation of $19,500 in support. If this does not happen, history will repeat itself and Bitcoin is likely to return to the current range. Thus, on a higher timeframe, the support levels visible on the price chart are still in the $14,000 and $16,000 range.
Gaps (gaps) in the CME’s futures schedule have been the focus of many discussions and remain an important variable that should be addressed.
As far as we can see now, a new Gap will be created as a result of this weekend, as the Friday closing price for the CME is $18.115. This futures gap is therefore likely to be an important entry or exit point for many, and so such gaps often become a self-fulfilling prophecy and are filled.
As a result of recent price movements, two gaps were formed on the CME chart. The first one was not fully closed – there is still a void around $17.015. The second one at $18.115 is likely to be created as a result of the bullish momentum of this weekend.
Important levels of volatility to watch out for
The critical levels on the chart are easy to determine. The resistance zone is between $19,400 and 19,600, which is the highest resistance zone of all time and the last before the BTC/USD exchange rate opens up new price levels.
However, its breakthrough today does not yet guarantee that the trend will continue. The resistance zone still needs to be successfully tested as support so that the rally can continue. Otherwise, another false breakout will be the likely scenario, as shown above.
On the other hand, the area of $18,500-18,600 needs to be held to prepare the ground for testing new highs. If this does not happen, the prospect of a retest of $16,000 or even $14,000 will still exist.