The Bitcoin market looks overall bullish. We are not going up at the moment, but we are consolidating and holding above the important supports. I try to explain what needs to happen for me to change my mind from bullish to bearish, or at least to ‘market needs more time to consolidate longer term before a new strong bull market can start’.
Here’s the familiar weekly chart that we have gotten used to looking at by now. Important supports are now the weekly moving average from 20 weeks which is colored white on the chart, the yellow horizontal line at $10.5k and the $10k round number since it’s so close to this $10.5k line.
So we could say that the important support area is now at $10k-10.5k. What makes this level important is not only that it’s a round number but because we see that in history the price has reacted to this level.
First the big rally top at $20k did not spend a lot of time above the $10k, 11 weekly closes in total. Then after the $10k was lost the market slowly ended up capitulating into $3k. After the big $3k bottom we had a very strong rally to $14k and this time stayed above $10k for 12 weekly closes before losing the battle and going below the white moving average from 20 weeks. After this we tested the $10k for two times before the biggest margin call cascade in the history of bitcoin.
After the big crash to $4k market fairly quickly got back above the 2020 yearly open at $7160, tested $10k again and then got above it where we are now. So this is why the $10k-10.5k is such an important level for me.
Now if we close back below the $10k level I’m not expecting that we see another margin call cascade crash like the one in March. That would be in everyone’s mind if we start going down and back in March almost no one expected it. The market simply doesn’t do what most expect.
Strong support would be 2020 open at about $7k and the most important moving average from 200 weeks (red) would be around there too. I would think this level would be the lower boundary for the range if the price gets back below $10k. So the range would be from $10k to $7k.
I think this was enough for now. Quarterly close was bullish and the second highest in the history of bitcoin, but I can write more about this next time.