Technical analysis: The important $50k level

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In the previous analysis from two weeks ago I was thinking that the $50k round number would act as an important resistance and getting above it could lead to a strong breakout.

We did see the price going above the $50k level followed by an accelerated rise for a short while, but the strong breakout failed at $58k. Now we are just right back below $50k where we were two weeks ago.

The correction from $58k to $43k stopped at the pink monthly average price and daily RSI hit the 50 level. This has happened many times during bull trends, so it is quite an usual bull market correction so far.

This $50k level is an important resistance. If we do not soon get back over the mark, it starts to suggest the price rise was not sustainable and this could trigger a sell-off to lower levels. Closest support below is now at $38-42k from the bigger correction that started 8th of January from the $42k top. Daily RSI could possibly hit the 30 level in this case also. This would most likely be a good buying opportunity.

In an extreme long squeeze a test of the $29k yearly open can’t be ruled out, but I doubt this will happen, The market sentiment turned bearish already quite quickly as you can see from the fear and greed index which dipped all the way to 38.

We could very well just get back above the $50k level now and then it would keep going up until another ATH breaks again. After that the climb towards the next big round number at $100k could continue.

If we rise fast closer to $100k then I suspect we need a bigger correction where the daily RSI would certainly hit that 30 level and possibly the weekly RSI would go closer to the 50 level. It could surely happen already, but I would say it’s more likely only smaller fish are selling here now and they will have to chase the price again when it turns back up.

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