Leading RoboForex analyst Dmitry Gurkovsky discusses possible further scenarios for Bitcoin’s price movement.
Bitcoin remains trapped within a correction. Volatility is diminishing, and with it the tension that will push quotes beyond the ‘Triangle’ pattern.
In most cases, such a pattern is broken by the market in the direction of the preceding trend. Since it would be bullish, do not rule out breaking through the $39,000 level and price growth as the pattern plays out.
The target for the rise could be the $50,000 level. A signal supporting a likely upward price rebound is the test of the RSI indicator’s support line.
Daily BTC/USD Bitstamp chart from TradingView.
The negative scenario for buyers could be a break of the lower boundary of the pattern. Analysts and traders note the importance of the $30,000 level. If bears manage to hold below it, this would confirm the break of the lower boundary of the ‘Triangle’ pattern and point to further development of the downside correction.
There is also positive news that not only supports Bitcoin at high levels but could also allow the asset to move higher. Demand from institutional investors remains.
According to Glassnode, the number of addresses holding more than 1000 BTC grew by 6.7% in 2020. In December the figure rose by 7.2%. Such a record number of cryptocurrency holders may serve as a positive signal that the market is still in a bullish trend.
Overall, addresses with at least two incoming transactions and from which funds have never been spent hold 2.7 million BTC. The increase was about 17% over the year. Such dynamics underscore a limited supply for sale, which will also help drive the upward trend.
Four-hour BTC/USD Bitstamp chart from TradingView.
Four-hour chart analysis points to a potential test of the lower boundary of the ‘Triangle’ pattern — the $33,750 level. After reaching it, a rise could begin.
An additional signal that would pre-emptively indicate an exit from the pattern would be a break of the descending trend line on the RSI indicator. A confirming signal would be a break of the $42,000 resistance level by the closing price. For now, there is another bounce from it downward, indicating pressure from sellers.
Meanwhile, Ethereum and Litecoin have already breached such a line upward. Altcoins may in the near term rise faster than the leading cryptocurrency.
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