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Bitcoin Friday: One week after the dip

In today's analysis, we will primarily look at the crucial levels that might decide the future of Bitcoin. We will also look at a shorter time frame and see what can happen over the weekend.

Key price levels

The dip that we saw last week not only changed the chart of Bitcoin, but also of some major altcoins. This crucial move, which had huge volumes and saw significant price drops also changed the way we should be looking at things. Thus, if there is something that we can rely on, it would be the key levels.

For Bitcoin, the current most crucial resistance is above 52 000 – 55 000 dollars. Before Bitcoin dropped down below 50 000 dollars, this price range was the most important support we had, which means that now it represents really strong resistance. Once we get over it, the bull market can continue. On the other hand, falling below 40 000 dollars can really harm Bitcoin. Going below this level can significantly increase the probability of the bear market.

Key price levels are as follows

Above 55 000 dollars – bull market can continue Below 40 000 dollars – huge chance of bear market Between 40 000 – 55 000 dollars – neutral zone

As you can imagine, right now we are in the neutral zone. To be more exact, as of now we are right in the middle of the zone. But there is no difference between the price at 41 000 dollars and 52 000 dollars, since this does not change anything from the point of the key levels.

Bitcoin 1D chart Bitcoin 1D chart

What can we see in the upcoming days?

The last few days have been relatively similar, with a slight tendency to move downwards. The indicator that you can see in my chart shows the volume at specific price levels. From that indicator you can see the price of Bitcoin is slowly rotating downwards as well. We see no specific impulse to move up. I would be very careful in assessing any buying or trading opportunities. As we mentioned yesterday, indices look bullish, but Bitcoin does not. Personally, I am waiting for some impulse and I will not be entering any trades until I see one. Relying solely on this chart now is a huge risk.

Bitcoin 1h chart with volume indicator Bitcoin 1h chart with volume indicator

Conclusion

As one could expect, this week did literally nothing important from the long term perspective of Bitcoin. It was only recovering from the Saturdays´ dip. However, next week will be very important mostly because of the FED meeting and tapering, which can have a huge influence on crypto.

Jakub is a crypto trader and founder of Trader 2.0 project, which helps hundreds of traders from central Europe to understand cryptocurrency trading and its challenges. Jakub not o...

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