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Bitcoin (Bitcoin) There has been an impressive 44% rebound in ten consecutive green trading days. This rebound and the large number of green days led to a shift in mood. Almost two weeks ago, the market was comparable to funerals, and many expected it to fall to $20,000.
However, after breaking through $31,000, market sentiment completely changed. The current sentiment is that Bitcoin is expected to rebound to $100,000 or higher in the second half of this year, and on-chain analysts are back in their game again.
Will Bitcoin break upward from here, or will there be a healthy correction? Let’s take a look at the technology.
A resistance of $42,000 prevents Bitcoin from breaking through
The weekly chart shows the current range structure of BTC/USD. In this structure, no breakthrough occurred. Last week, the price of Bitcoin tried to break through the resistance zone, but it was still unable to force a breakthrough.
Therefore, the conclusion is that the market is still uncertain about the market direction at this stage. However, the weekly chart also shows clear support in this area between US$28,000-31,000. Although the Bitcoin price was extremely pessimistic the last time it touched this range, the level has been tested many times and still remains as a support level.
Finally, if the market wants more information about the direction, a lower time frame usually indicates further clues that should be paid attention to.
Bitcoin daily chart prepares for health correction
Bitcoin’s daily chart does not tell us much, although the recent rally is a steep ladder of green candles.
This rebound not only shows the interest of the market, but also shows that the most popular forecasts are often wrong. When the price of Bitcoin hovered around $30,000, many people expected it to plummet further to $20,000. On-chain analysis shows that short-term holders have been selling a lot in this range, and further adjustments are expected, while long-term holders have been increasing their holdings.
Therefore, the exact opposite of the correction occurred. Bitcoin rebounded 44%, while altcoins rose 70%-150%.
In addition, if the price of Bitcoin cannot further break above 42,000 USD, the region may verify potential higher lows at around 36,000 USD or 33,000 USD.
However, if the market is really bullish, then a sharp adjustment to $33,000 will be unwelcome, as this adjustment will once again provide entry positions for latecomers.
In addition, a correction to $36,000 will produce a higher low, which will confirm the market trend change. After the higher high, the higher low confirms the trend change and bullish divergence, making the $36,000 scenario the best level for this to happen.
The total market value is also facing huge resistance
The total market value of cryptocurrencies has seen a devastating and rapid collapse of 55%, leading to a shift from euphoria to frustration.
However, judging from the chart, a healthy and beautiful retest was conducted at the level of 1.1 trillion US dollars. This level was not tested during the entire upgrade process. Now, it has finally been retested, which has led buyers to intervene.
This level is comparable to Bitcoin’s $28-31,000 area, which has passed multiple tests. However, the total market value of cryptocurrencies does not seem to be ready for an upward breakthrough, as it currently faces a critical resistance zone of $1.75 trillion.
The red area shows resistance many times, forming an interval structure. In this structure, a higher low is required to confirm a change in trend. In this regard, the low of $1.35 trillion will be a good level for continued bullishness. If the total market value exceeds $1.75 trillion, it may hit a record high.
Focus on key levels of Bitcoin in a lower time frame
The 1-hour chart of Bitcoin clearly shows the current market. Within 4 hours, a bearish divergence was found, which will be confirmed if the price of Bitcoin drops below $38,500.
On the 1-hour chart, the price of Bitcoin fell below the support level of $40,800. This decline means that the market has collapsed and subsequent support must be tested. The next support level is $38,600.
However, there are not many breakdowns because the actual stop loss is below the recent low of $38,500. Therefore, if the market crashes again, it is possible to make more substantial corrections to 36,500 USD and 35,000 USD.
Such a correction will correct the entire market, through which the ether (Ethereum) May also fall to US$2,300 and US$2,000.
The key downside levels are US$38,500, as well as US$36,500 and US$35,000.
Finally, the key resistance to break the Bitcoin price is at $40,600-41,000. If this level is broken, it is likely to see the rally continue to $48,000, as the price of Bitcoin will break the recent high of $42,000.
However, after such a large rebound and rapid emotional shift, the correction is very healthy, especially if Bitcoin cannot break through $40,800 in one go.
The views and opinions expressed here only represent author It does not necessarily reflect the views of Cointelegraph. Every investment and transaction involves risks. When making a decision, you should conduct your own research.
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