Bitcoin price recovering over the weekend: is $20,000 close?
Over the weekend, the price of BTC broke through some very important resistance thresholds: the week opens with strong optimism
Bitcoin (BTC) is back in the spotlight after MassMutual decided to allocate $100 million from its portfolio to buy the cryptocurrency: in addition to the impressive buying pressure of this period, this renews hopes that BTC will surpass $20,000 by year-end.
Although a Bitcoin Trader correction occurred last week, Bitcoin’s price has broken through the crucial $18,600 level and is now aiming for new all-time highs. However, as the recovery occurred over the weekend, bullish people are concerned about the relatively low volumes.
Bitcoin breaks above $18,600 and back in range
The 4-hour chart tells the recent rise of Bitcoin very well. Initially, the price fell from the crucial support zone at $18,500, and then continued the collapse towards the next one at $17,600.
This support zone held, resulting in a bullish divergence. Similarly, sellers were unable to force a collapse below $17,600 as buyers intervened at this level.
From there, the next resistance area was the $18,500 level, which was quickly breached in a few hours. BTC seemed to be heading towards $19,500.
Will bitcoin behave like it has in the past again?
This analysis gives an idea of how resistance and support zones are created after the asset has received upward momentum. This has happened to Bitcoin several times over the course of the year. The first time it happened shortly before halving, the second time in August and another time in recent months.
However, each time such an impulse move occurs, a range is built, as markets need to generate strength to continue the momentum. No asset grows linearly: it has to test previous resistance levels to continue growth.
In all previous range building phases we can see an ascending wedge, with a mock breakout above the most recent peak. Given what happened over the weekend, the likelihood of this happening again is increasing.
If this analysis turns out to be correct, a push towards $21,000 is possible: if it happens, the $19,500 area will become the next support zone. If not, history will repeat itself and Bitcoin will most likely fall back into the previous range. Therefore, the support levels to monitor would be $14,000 and $16,000.
Gaps on the CME futures chart have been the focus of much discussion and remain an important variable to watch.
Undoubtedly, a new gap will be created as the last close came in at $18,115: it will likely become a significant entry or exit point, which is why such gaps often become „self-fulfilling prophecies“ and are filled.
There are two gaps at the moment, resulting from recent price movements. The first has not been completely filled, at $17,015. The second, at $18,115, will be created by the weekend’s upward movement.