Bitcoin (BTC) is a deflationary currency that is basically supposed to rise in price. In the long run, this has always occurred until now. In the picture Bitcoin coins in front of a smartphone price graph.
Higher, faster, further. This is probably the current motto for the Bitcoin price. One all-time high is chasing the next. A correction is not in sight and yet there are always signs that call for caution. In the following analysis, important price levels are filtered out on a weekly, daily and 4-hour basis.
All good things come in threes for the Bitcoin price
It has now been three weeks since the all-time high of 2017 was toppled. In our report of 12/14/2020, we already drew attention to the fact that an enormously strong movement was imminent. The current end of this movement is now at $34,810 on Coinbase. Which does not mean that this must have been the end for the Bitcoin Evolution and however, should a correction occur, the first longer-term support zone would be between $19,300 and $19,900.
This huge move over the last three weeks has been supported by crypto external capital inflows and coin shifts towards Bitcoin. However, we can only guess, let alone predict, whether this will be sustained.
Also in the Daily an expensive Bitcoin rate
Due to the constant rise, the Bitcoin price does not come to any recovery and is under constant stress. The Relative Strength Index (RSI), which indicates whether a market is expensive or cheap, is not only sounding the alarm in the Weekly. Also in the Daily, the RSI is now again above 90, which just screams for a correction.
But every small price drop is immediately bought up again and the market never has the chance to recover and rest a little. Currently, other coins provide much better entry points for a medium-term long position.
A correction in the Bitcoin price could come back to the level between the two Daily Keylevels. This zone stretches from $22,800 to $23,850. As the next support below it, we turn our attention to the zone from the Weekly chart.
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Good entries in a smaller time frame
In our last report, we drew attention to the continued bullish market structure. This signals a trader to look for long entries. Within the last week, this created two perfect opportunities to trade the bitcoin price on the long side.
With the break of the 4-hour key levels and the subsequent confirmation of that, one could not go much wrong with long trades.
Trades against the trend are riskier and work less on a percentage basis than trades with the trend. Not for nothing it is said „The trend is your friend!“. If the Bitcoin price falls below the $32,225 mark per candle close, you should keep an eye on the next support zone at $28,800 and $29,360.