Bitcoin’s price is about to have the biggest monthly close in its history, but the highs must be above USD 14,000 to reach a new all-time high.
The Bitcoin price (BTC) is certainly having an impressive year after falling to USD 3,700 in mid-March, and then reaching USD 14,000 in the following months. The BTC price has now reached its highest point since January 2018, as the price reached USD 14,100.
The likelihood of a further upward cycle therefore increases considerably as the price of Bitcoin continues to reach new higher highs and lower lows. Moreover, the strength is seen even as the DXY index, with which it usually has an inverse correlation, is also recovering amidst the uncertainties of the coronavirus.
Bitcoin has yet to break out of the USD 13,700 to USD 14,250 area
The weekly chart shows some critical levels that must be observed to continue the upward momentum. One of these is the current resistance zone around the USD 14,000 threshold. Breaking out of this resistance zone would give greater strength towards the next threshold of around USD 16,500 to USD 17,000.
These two levels are the last hurdles before seeing a possible new historical high, while most altcoins are still experiencing large losses compared to their 2017 highs.
There are two crucial levels to watch out for on the downside. The first and main switch is the area from USD 11,400 to USD 11,800. This has been the crucial resistance zone for two years which means that it could be tested again before the price rises further.
However, if that area is lost, the next support zone is between USD 10,100 and USD 10,400.
The highest monthly close is possible for Bitcoin
As we can see from the monthly graph, the highest monthly closure is possible for Crypto Superstar Bitcoin, an incredible achievement 12 years after the launch of its whitepaper.
However, it also shows the importance of this resistance zone, as it is the last major obstacle before the historical high can be reached.
If the USD 13,700 to USD 14,200 zone is passed, continuation to new historical highs is almost guaranteed as there are not many levels in between.
However, the beginning of a new upward cycle is often accompanied by periods of accumulation, through which previous resistance zones are retested and confirmed as support. Such a build-up period would mean that the Bitcoin price could fall to USD 11,600 to find sufficient support before a sharp upward movement.
Current market behaviour is comparable to the 2016 cycle
The 2016 graph shows these accumulation ranges through which a healthy trend was established. All previous resistance levels were re-tested for confirmation, after which a range for accumulating Bitcoin was established.
After a limited range construction, compression began to build up, eventually resulting in a large breakthrough.
Another positive sign is the rapid purchases during market corrections. These are shown with long fuses while buyers rush in to buy when the price drops. A similar movement may occur if the market corrects in the coming weeks.
Possible scenario for the Bitcoin price
The current area of USD 11,400 to USD 11,800 is a very important resistance zone. If the Bitcoin price falls out of this resistance zone, a correction will become the possible scenario for the pair.
Therefore, the possible scenario for Bitcoin is a stock with a limited range between USD 11,400 and USD 14,200.
Ether and other altcoins may appear on the scene when Bitcoin finishes its correction and begins building a lateral range. It will probably take a few more months before the altcoins can begin to move upwards.