Important points
Bitcoin (BTCUSD) hit new highs ahead of President Donald Trump’s inauguration on Monday, but the new US president, who has been a vocal supporter of the crypto market, mentioned Bitcoin during his inaugural address and other appearances. As a result, the rate of increase narrowed. office.
Bitcoin rose in November amid optimism that the Trump administration could reduce regulatory hurdles, establish a Bitcoin reserve and move forward with other efforts to increase adoption of the digital asset. It’s up nearly 50% since the early elections.
Bitcoin rose as high as $109,300 early Monday, but has recently been trading at $102,800.
A bearish candlestick pattern signals caution
Today, the price of Bitcoin rose to an all-time high before retreating to form a shooting star, a candlestick pattern that warns of a possible reversal. Furthermore, this shooting star followed a bearish engulfing pattern over the weekend, which is also a candlestick pattern that warns of a downside.
In a further sign of price momentum weakening, as today’s peak forms higher highs, the Relative Strength Index (RSI) forms a relatively shallow high, creating a bearish divergence between price and the index, leading to a double. Shows top potential.
We identify three key levels where Bitcoin could gather support during a retracement, while also noting key overhead areas that could come into play if the cryptocurrency’s price continues to rise. Let’s try it.
Key support levels to look out for
The first significant lower level to note is around $92,000. This area is likely to encounter support near the early November peak that coincides closely with several return troughs that formed on the chart from late November to early January.
If it closes below this level, it could fall to the $87,000 level. This level is a position on the chart where investors can look for buying opportunities near the bottom of the pennant pattern that preceded the cryptocurrency’s rally in the first half of December.
If Bitcoin bulls are unable to defend this level, it opens the door for an even deeper decline to around $74,000. Investors favoring a buy-and-hold strategy may seek an entry point for the region near the multi-month horizon connecting the March and October 2024 peaks with the nearby rising 200-day moving average. .
Important overhead areas to monitor
If Bitcoin moves higher from here, investors should keep an eye on the $106,000 area. The cryptocurrency has struggled to post a definitive close above this figure since hitting a record closing high in mid-December.
Finally, the $120,000 area is worth keeping an eye on. Here, overhead selling pressure may be found around the measured moving price target, which calculates the depth of the cryptocurrency’s recent range trading activity and adds that amount to the breakout point. For example, adding $14,000 to $106,000 predicts a goal of $120,000.
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As of the date this article was written, the author did not own any of the securities mentioned above.
