Trader flags key resistance level as Bitcoin eyes a fresh all-time high

The trader Ilya Meshcheryakov explains the current market situation.

Last week proved quite positive for the cryptocurrency market: the established minimum formed above the $50,000 mark, after which Bitcoin rose above $58,000. Bitcoin was trading near this level at the time of writing.

Uncertainty, noted in the previous briefing, broke to the downside, leading to a price drop of more than $5,000 and a significant reduction in open interest in long positions. This allowed the rally to continue without a protracted consolidation and opened targets above $63,000 over the coming weeks.

The current hourly-chart formation is similar to the January 2021 formation near $30,000 (shown at the bottom left of the chart), with some deviations. A breakout to the upside propelled Bitcoin to new price highs, rising more than 100% from the lower bound of the range.

Given the similarities in duration and structure, the impulse targets are around $75,000.

In the near term, the steady climb toward around $56,000 accelerated, thereby creating a large stack of long positions with substantial leverage.

From the chart below, it follows that almost every rapid rise was followed by significant pullbacks. The nearest relatively safe entry points for a long position are near $55,430-$56,406.

A strong resistance zone sits near $59,400. From there, heavy selling followed, with a subsequent move below $51,000. The price will almost always react with a substantial decline, but after crossing these levels, obstacles on the path to a new ATH will be few.

The near-term trend is somewhat bearish due to overbought conditions after the acceleration of the upside move. Medium- and long-term prospects look positive as the downwards accumulation zone has been breached to the upside.