Bitcoin traders are strategically targeting significant price levels as the cryptocurrency market shows early signs of vibrant activity this year. Bitcoin’s price hovered around a crucial $97,000 resistance during the opening of Wall Street trading, despite concerns about a potential downward correction.
Recent trading data revealed that Bitcoin surged past the $97,000 mark as the US trading session commenced. Following swift gains at the beginning of the year, Bitcoin has retested the $96,000 support level and is now aiming to reclaim its 50-day simple moving average (SMA), priced around $96,740. This SMA had previously provided support for over two months before Bitcoin’s price fell below it in late December.
The breakout from a falling wedge pattern has been noted with cautious optimism by market analysts. They advise against overcommitting to long positions, emphasizing the need to reclaim and turn the 20 and 50 SMA into support levels.
Some market participants on social media anticipate that Bitcoin will retest these key trend lines as support. Such a move could reignite the bullish momentum that started to fade last month. However, caution was urged on shorter timeframes, with traders noting a low volume pump accompanied by an overbought stochastic relative strength index (RSI) above the 70 threshold.
Other resistance levels, such as the 200-period SMA on the 4-hour charts, are also under scrutiny. Traders observed that Bitcoin is trading near a high volume node, suggesting potential ease in price movement once it breaks away from this area. A decisive move above $98,000 could potentially reignite a rally towards all-time highs, while holding above $95,000 remains critical for maintaining short-term momentum.
Market analysts suggest the likelihood of a deeper price correction before the uptrend can fully resume. Prominent among them is BitQuant, an analyst who has correctly predicted previous market inflection points. He advises against being influenced by potential panic during a possible price dip, advocating for buying opportunities instead.
His analysis envisions a potential dip towards the $80,000 range, aligning with earlier predictions of market support.
As always, trading in Bitcoin carries risk, and participants are encouraged to conduct their own research before making investment decisions.
