- Bitcoin has recently broken above the $4,000 handle once again in today’s trading session.
- However, analysts are cautious as to whether this is just a “bounce” before the long-term bear trend continues.
- Support moving forward: $4,108, $4,001, $3,851, $3,701, $3,500, $3,468, $3,352, $3,228.
- Resistance moving forward: $4,215, $4,342, $4,576, $4,710, $4,877, $4,931, $5,000, $5,116.
Latest Bitcoin News
Bitcoin has finally penetrated back above the $4,000 handle and continued to surge up into the $4,200 level before stalling in today’s trading session.
The recent market movements should bring some joy in the hope that this may signal the end of the previous long-term bear market — however, not all analysts are convinced that it is over.
Mike McGlone, an analyst at Bloomberg Intelligence, believes that the the “reduction in selling is a good reason for the bounce” and stated that we need to wait to see how long the duration of the bounce is “before resuming a longer-term bear market.”
Mati Greenspan, eToro senior market analyst, claims that “BTC is much closer to the bottom than it is to the top,” indicating that the market is still a long way away from a recovery. However, Greenspan did elaborate that the industry is growing at a rapid rate as more businesses enter the industry.
During the recent price surge, the entire cryptocurrency industry market cap had added a total of $7 billion to the books, bringing the entire market cap value up to around $138 billion.
An analyst by the alias of The Crypto Dog stated that “the overall market cap valuation needs to break above major resistance at the $160-$180 million mark” before we can become “excited” about a potential recovery.
Let us continue to take a look at price action for BTC/USD over the recent term and highlight any potential areas of support and resistance moving forward.
BTC Price Analysis
Bitcoin has seen a recent price hike totaling 6% over the previous 24-hour trading period as the market now is exchanging at a price around $4,151, at the time of writing. The market has now undergone a price rise totaling 6% over the past 7 trading days, with a further price surge totaling 18% over the previous trading month.
Bitcoin, still ranked first, presently holds a $71.08 billion market cap value. However, the 68-month old cryptocurrency has a long road to recover after losing 38% over the previous 90 trading days. The market now trades at a value that is 79% lower than the all-time high trading price.
Looking at the 4-hour BTC/USD chart above, we can see that since our last BTC/USD analysis, price action had fallen into our support area provided by the short-term bearish .382 Fibonacci Retracement level (drawn in red) priced at $3,701.
After the market rebounded from here, price action went on to consolidate in a tight symmetrical triangle pattern for the next few days.
BTC/USD had broken out of this triangle pattern during today’s trading session as the market surged up into our previously called resistance area. This resistance is provided by the short-term bearish .786 Fibonacci Retracement level (drawn in red) priced at $4,215, a resistance level also called in our last analysis.
This bearish Fibonacci Retracement is measured from the final “lower high” peak placed toward the end of November 2018 to the low seen in December 2018.
Trend: Bullish Above $4,350
If the buying pressure can cause BTC/USD to break above the December 2018 peak at $4,350, we can expect the recently established short-term bullish run to continue higher.
At this moment in time, the market is still trading within a consolidating sideways nature until this recent peak is breached.
For the market to be considered bearish again, we would need to see BTC/USD break below the previous support level at $3,700.
Where is the Resistance for BTC Above the $4,215 Handle?
If the bulls break above the current resistance at $4,215, they will encounter immediate resistance at the short-term bearish .886 Fibonacci Retracement level (drawn in red), priced at $4,342.
If the bullish pressure continues to drive the market higher above the $4,500 handle, then further resistance above will be located at the longer-term bearish .382 Fibonacci Retracement level (drawn in blue) priced at $4576. This Fibonacci Retracement level is measured from the high seen during November 2018, before the market collapse, to the low of December 2018.
Further resistance above the $4,576 level can be expected at the short-term 1.272 and 1.414 Fibonacci Extension levels (drawn in orange), priced at $4,710 and $4,877.
If the buyers can continue to break above the $5,000 handle, we can expect more resistance above at the short term 1.618 Fibonacci Extension level (drawn in orange), priced at $5,116.
Where is the Support Below the Market?
If the bears step back into the market and push price action lower, the first area of support will be located at the short-term .236 Fibonacci Retracement level (drawn in green) priced at $4,108, closely followed by the bearish .618 Fibonacci Retracement level (drawn in red) priced at $4,001.
If the sellers break below the $4,000 handle again, we can expect more support toward the downside to be located at the bearish .5 and .382 Fibonacci Retracement levels (drawn in red), priced at $3,851 and $3,701 respectively.
Further support below $3,700 can be located at the short-term .786 and .886 Fibonacci Retracement levels (drawn in green), priced at $3,468 and $3,352. This is closely followed by the previous downside 1.618 Fibonacci Extension level (drawn in blue) priced at $3,228.
Conclusion
According to high-profile analysts, the break above $4,000 should be taken with caution as they believe that Bitcoin may be heading further lower during the first two quarters of 2019.
However, analysts can also be wrong so it is important to follow price action closely and wait for the market to either break above the important resistance levels above ($4,350) before making any committed trading decisions.
