Once again, the Bitcoin price has shown its best side.
But will the price continue to rise? Many investors are looking for cheap entry points to either invest for the long term or catch a few percent quickly. This analysis will take a closer look at the important support zones for the different time units on a weekly, daily and 4-hour basis.
With volume to the high
After the break of the old All Time High of 2017, two very strong weekly candles followed. Almost daily there are new all time highs for the Bitcoin price. Most recently on December 27 at the mark of just under $28,400 on Binance, the world’s largest crypto exchange. Lots of volume means lots of trading. This has been the case over the last two weeks.
The relatively long upper wick of the last weekly candle suggests that there is a resistance zone there. Profits were taken in this zone and long positions were reduced or closed. This is more evident in the daily and 4-hour time frame.
If you look at the Relative Strength Index (RSI, at the bottom of the picture), an indicator that shows buying power, you can see that the Bitcoin price is in the extremely expensive zone. Traders see this as a warning signal for a possible upcoming correction or an incipient sideways phase. The Weekly and Monthly key levels below the Bitcoin price serve as potential support. The zone of $19,300 and $19,900 is seen as Major Support for the time being.
Bitcoin price bullish in the Daily chart too!
The bullish structure of the weekly chart continues unbroken in the daily. Higher highs and higher lows are being set. The last sideways phase between the two Daily key levels is now considered the first support should the price make a price correction. The next support zone, as in the Weekly, is between $19,300 and $19,900.
A change in the longer-term market structure will only become interesting if the Bitcoin price should fall below the two support zones mentioned above. Everything above that continues to be bullish in the long term. Smaller setbacks are immediately bought back and the RSI shows an unbroken high buying power.
Already in this report, we referred to the upcoming trading volume should bears or bulls prevail at the resistance of the old All Time High of 2017.
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To make decisions for long-term investments, the 4-hour chart is not suitable, but all the more to trade short price rises or falls. Thus, it would have been possible to take the breakout from the range of the two daily key levels. This breakout range is now considered a strong support for trades in the short time frame. The two upper 4-hour key levels should be noted. If the Bitcoin price breaks out of this range, it is possible to trade the movement in one direction or the other.