Bitcoin price is on the verge of its highest monthly close ever, but bulls still have to break through $ 14k to try to reach a new all-time high.
The bitcoin (BTC) price is undoubtedly having an impressive year after dropping to $ 3,700 in March, but then surging to $ 14,000 in the following months. BTC has now reached its highest point since January 2018, when the price hit $ 14,100.
Thus, the likelihood of a new bull cycle is greatly increased as the price of bitcoin continues to make new higher highs and higher lows. What’s more, the strength is even visible, while the U.S. dollar currency index, with which it tends to be inversely correlated, is also recovering amid coronavirus concerns.
Bitcoin has not yet broken the $ 13,700-14,250 area
The weekly chart shows some important levels to watch out for in order to continue the bullish momentum. One of these is the current resistance zone surrounding the $ 14,000 threshold. Breaking through this resistance zone will initiate further strengthening to the next threshold around $ 16,500-17,000.
These two levels are the latest hurdles ahead of a possible new all-time high, while most altcoins are still suffering huge losses from their 2017 highs.
There are two important levels to watch out for. The first and main offender is the $ 11,400-11,800 area. It has been a critical area of resistance for two years, which means it could be re-tested before another upside potential emerges.
However, if this area is lost, the next support zone will be between $ 10,100-10,400. These two zones are critically important to hold if the market is in bullish territory.
Maximum possible closing in a month for Bitcoin
As the monthly chart shows, Bitcoin may have the highest monthly close in history – an incredible achievement 12 years after the release of the official document.
However, it also shows the significance of this resistance zone as it is the last major hurdle before the all-time high can be challenged.
If $ 13,700-14,200 breaks through, further advance to new all-time highs is almost guaranteed as there are not many levels between them.
However, the start of a new bullish cycle is usually accompanied by periods of accumulation during which previous resistance zones are retested and confirmed as support. Such a hoarding period would mean that Bitcoin’s price could adjust to $ 11,600 to find sufficient support ahead of a major rally.
The current market behavior is comparable to the 2016 cycle.
The 2016 chart shows these accumulation ranges across which a healthy trend has been established. Each previous resistance level was retested for confirmation, after which a range was set for the accumulation of bitcoins.
After this limited range design, compression began to build up, eventually leading to a massive breakout.
Another powerful signal is fast buying during a market correction. They are shown with long wicks as buyers quickly step in to buy when the price falls. A similar move could occur if the market corrects in the coming weeks.
Possible scenario for bitcoin price
The current area of $ 11,400-11,800 is a critical resistance zone. If the bitcoin price falls to break through this resistance zone, the probable scenario would be a correction.
Consequently, a possible Bitcoin scenario is an action with a limited range between $ 11,400 and $ 14,200. Such a side structure would be similar to the accumulation period of 2016.
Ether and other altcoins may appear in the part when Bitcoin completes its correction and goes into a sideways construction. It will most likely take a few more months before altcoins begin to rise.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risk. When making a decision, you should do your own research.