Bitcoin price (BTC), the cryptocurrency best rated by market capitalization, has ranged from $ 8,600 to $ 10,500 since halving. During the two months of lateral trading (in a well defined range, also called consolidation), the market started to move and altcoins came into focus.
According Coinmarketcap, currently the Bitcoin market capitalization is USD 167,372,723,757.
Furthermore, the traders and investors are constantly debating whether the Bitcoin price is still in bullish or bearish territory. Let’s take a closer look at the charts to see where Bitcoin’s price is heading.
Daily performance of the crypto market. Source: Coin360
Bitcoin needs to maintain support above crucial $ 8,600 level
Bitcoin price has to sustain the critical level above the $ 8,550-8,750 area.
1-day chart for the BTC / USD pair. Source: TradingView
Bitcoin price has been on a significant uptrend since the big drop in March. The uptrend is classified through higher ups and downs, and the recent decline is in the $ 8,550-8,750 area.
This is a significant area because traders use these points to place stop / loss levels (levels to stop transactions or losses). But since Bitcoin’s price has been slowly receding and consolidating, the focus should be on volume.
During the consolidation period, the volume decreased steadily. This is an indication that we are not “moving”, which would mean a new trend. This move would be confirmed with a strong break above $ 10,500 or a strong break below $ 8,500.
An example is seen in the consolidation period of 18 months ago, between 3,500 and 4,000 dollars.
A great movement is on the horizon
In the first quarter of 2019, the price of Bitcoin moved within a narrow range.
1-day chart for the BTC / USD pair. Source: TradingView
This is significant because it shows what usually happens over a long period of side trading and why the current stage is also classified that way.
During the 2019 consolidation period, the volume drained over time. The actual climax of the volume came with the breakout, which meant that the breaking traders reached their buying limit and the short sellers reached their stop / loss.
This chain reaction caused a sudden $ 1,000 candle. When the price has been hovering in the range for months, the breakout is usually significant and explosive.. The longer something is in a certain period of accumulation, the greater the movement once it breaks.
This exact example can be seen with many altcoins, since some of them have been in a range of accumulation. An example is Zilliqa (ZIL), which went out of range and rose 1,000% since then.
Crucial levels in smaller time frames for the price of Bitcoin
Crucial short-term levels are essentially support between $ 8,800 and $ 9,000 and resistance at $ 9,300. The latter is more important since an advance of the $ 9,300 level would indicate an upward continuation.
4-hour chart for the BTC / USD pair. Source: TradingView
The 4-hour chart shows a clear consolidation structure. Support is between $ 8,900 and $ 9,000, which must be supported by the bulls. As long as that is the support, a new test of the resistance zone is in sight.
Generally, the more a level is tested, the weaker it becomes. Thus, a new stress test at the $ 9,300 level could lead to a significant breakdown as would put Bitcoin’s price back within the previous range.
In other words, the chances of a further decline are reduced if the $ 9,300 is recovered.
Total market capitalization maintains support above the 100 and 200 day MA
Chart of the total capitalization of the cryptocurrency market for one day. Source: TradingView
The total capitalization of the cryptocurrency market is also keeping he previous lower level as support.
Most significantly, the total capitalization of the cryptocurrency market remains above the 100 and 200 day moving averages (MA). As long as these remain, market capitalization is in bullish territory.
This is because it is an important indicator of bullish / bearish momentum. The 100 and 200 day MAs have been supportive throughout the previous cryptocurrency market cycle.
With these levels as support, a breakout of more than $ 260 billion is increasingly likely. Regaining the $ 260 billion level would also add fuel for further momentum towards new highs.
Bullish scenario for Bitcoin price
4 hour bullish scenario chart for the BTC / USD pair. Source: TradingView
The bullish scenario has some crucial points. First, support at $ 8,900-9,000 has to be maintained. If this support is lost, BTC / USD will likely drop below $ 8,550-8,750 in bearish territory.
Second, key resistance at $ 9,300 has to break for potential recovery to $ 9,650. As this level is not tested, it would be the first pinto point for a higher rise. This previous resistance of $ 9,300 has to go around to get support for a higher move.
However, as long as Bitcoin’s price remains below $ 10,500, the volume of the move is expected to be small. A major breakout would occur if the $ 10,000-10,500 resistance zone is finally conquered, while several trigger values are reached.
It wouldn’t be a surprise to see one fast rise in a few hours to the next major resistance zone of $ 11,600.
Bearish scenario for Bitcoin
4 hour bearish scenario chart for the BTC / USD pair. Source: TradingView
The bearish scenario also depends to a large degree from the $ 9,300 level. If that level is rejected again, a new test of support between $ 8,800 and $ 8,900 should be expected and the weaker this support, the more chances there will be more losses.
With $ 9,300 as resistance, a new test of $ 8,800-8,900 would likely result in another fall.. Going down from the $ 8,600 level you could also see a large volume drop because this means that the range of the last two months would be lost.
If Bitcoin’s price drops below $ 8,600, I expect a rapid drop to $ 7,400-7,700 without much opportunity for short positions.. Maintaining current support and 1-day support levels would mean the market is still in great shape.
The views and opinions expressed here are solely those of the Author and do not necessarily reflect Cointelegraph’s views. Every investment and trading movement involves risk. You must carry out your own research when making a decision.
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