Bitcoin’s price of $17,000 is a real possibility if bullish players convert the $12,000 into support
Bitcoin’s newfound bullish momentum has traders aiming for USD 12,000 or more.
The Bitcoin (BTC) price had been operating within a narrow range for the past few weeks, but the momentum and trend changed when an upward break occurred after Square announced that it had allocated 1% of its cash reserves to BTC.
This bullish break even pushed the price up from USD 10,600 to USD 11,500, which is almost USD 1,000 in a few days.
Despite this strong upward movement, traders remain cautious, as they are not sure if the upward momentum has returned or if this is just a temporary irregularity.
Such a breakout seems unlikely in the short term, as the price of Bitcoin Bank is approaching the resistance zone all at once.
Bitcoin Faces Crucial Resistance Overload
The Bitcoin daily chart shows a clear upward movement towards the upper range resistance. The critical factor to consider is whether the USD 12,000 to USD 12,400 resistance zone breaks, as this would imply that there is another momentum wave on the horizon.
What is the K crisis? And how does it affect Bitcoin?
While most investors expected more downward movement, the opposite happened. There were several negative news items last week, but none of them affected the price of Bitcoin.
What did move the market, however, was the announcement of a $50 million allocation from Square. Shortly after the news, the triangle exploded upwards and recovered through the USD 11,100 resistance zone.
This led to a strong upward reaction in the cryptomoney markets. A more decisive move to consider would be a clear breakout of the current range-boundary structure and this would occur if the price can exceed USD 12,000.
Limited range constructions at the beginning of a bullish cycle are likely
The current movements can be compared to the start of the previous bull cycle in early 2016.
During the beginning of the previous bull cycle, similar movements were observed. It occurs before the parabolic movements occur, through which the period can be defined as boring.
Goldman Sachs analysts are pessimistic about the USD in the short term, how does it benefit Bitcoin?
In 2015 and 2016, a six-month period was defined by building range limits before a breakout occurred.
During these constructions, previous resistances were confirmed as support, after which a boring lateral period continued to occur.
As the chart shows, the above resistance zone was tested at USD 10,000 for confirmation, and this is exactly what happened.
This confirmation led to a rebound, as the previous days have shown. The critical level to break for further upward momentum is the USD 12,000 resistance zone.
However, as the current construction is similar to movements in 2016, a breakout could take some time to occur.
However, as the current construction is similar to the 2016 moves, a breakout could take some time to occur. Thus, if a breakout occurs above USD 12,000, an upward movement towards USD 17,000 is very much on the horizon. The area around USD 17,000 is the next center pivot and the last hurdle before new historical peaks can occur.
The Dollar’s fall joins the increase in the hash rate: 5 things to see in Bitcoin this week
A possible scenario for Bitcoin
A very likely scenario is the continuation of movements within the range, as discussed primarily in this article.
In that sense, the upper resistance zone is between USD 12,000 – USD 12,400. It is unlikely that a single breakout will occur, which means that there is a new test of lower levels within the possibilities.
What is the crucial area to maintain for further continuation? That’s on the trend line, but it’s similar to the support level shown in the chart below.
The upper green zone between USD 10,600 and USD 10,850 is crucial for holding. If this level is maintained and the scenario continues to develop from here, the bull market is still on the rise.
As discussed above, a break above USD 12,000 would mean a big wave of upward momentum and the possible continuation towards a new historical peak.