The price of Bitcoin can see its monstrous recovery continue if new levels of technical support are confirmed.
Bitcoin (BTC) had a tremendous year in 2020, with the price of BTC rising 311%. In the Bitcoin shadows, Ether (ETH) also saw a fantastic year when the price of Ether went up another 475%. Although only five days after the beginning of the year, ETH continues with this trend.
Bitcoin breaking new records over $30,000 generated a major rally fire that is now spreading to altcoins. However, the question now is whether the bullish run will continue vertically, as it has in recent months, or whether a short-term correction should be expected.
Such a correction would open the door for most cryptomites to follow Bitcoin towards their respective historical highs.
Bitcoin should sustain the 21-week MM
There are not many indicators to observe the continuation of this bullish market, as only a few provide strong enough arguments for high/low cases.
But one useful indicator is the 21-week moving average (MM). This MM served as a support during the previous bullish run, which indicated a continuation towards a maximum peak of $20,000.
As long as Bitcoin is based on this MM, there is likely to be continuity for the BTC/USD pair. At this time, the MM of 21 and maintains support at the $16,000 level.
However, fixes are common with consolidations that may cover the coming weeks. During these weeks, the MM of 21 weeks will drag itself up. Therefore, the combination of the future outlook of the MM 21 weeks with the all-time high gives a final fund for a $20,000 region correction.
Whether Bitcoin Legacy has reached its peak for the time being is a matter of debate, as many upward signs are still blinking. This bullish price action is combined with a constant output of the exchanges, a bullish signal to the market. It is likely that this Bitcoin will be maintained for a longer term, which makes this bullfighting cycle very different from the 2017 bullfight.
Using the Fibonacci extension tools, the continuation of the current rally puts the next levels of interest at Fibonacci levels 1.618 and 2.618, where the next big corrections can happen. These levels are currently at $50,000 and $76,000.
However, it will come as no surprise if Bitcoin reaches $76,000 this year, given its recent strength.
Total Capitalization of the Cryptomachine Market Has New Highs
Total market capitalization is also reaching new highs, as Bitcoin and Ether have done tremendously well in recent weeks. The market capitalization of the altcoins has fallen sharply, as Bitcoin often comes out ahead. But once Bitcoin stabilizes, many other cryptomaps tend to follow suit with sudden highs.
This is because of the way money flows through the markets. First, the fact that Bitcoin is in the spotlight attracts capital flows. Then, as investors look for even higher risk/reward opportunities, money flows to large and medium capitalizations and so on.
However, in the case of a consolidation, the levels to be observed for the total market capitalization are shown on the chart: It is the all-time high of around US$700 billion (which should have already been tested) and the area around US$550 billion
What are the levels to be observed in short periods of time?
The hourly table for Bitcoin shows a slight drop since the recent peak of US$34,800. The $32,400-$32,800 zone has reversed the resistance, which is usually a low signal.
However, the $30,000 barrier has already supported three times. Therefore, this is the crucial area to be maintained to ensure an additional high thrust. If this level breaks down as support, a drop to $27,000 to $27,500 becomes probable.
If maintained, continuation towards the critical breaker on the positive side is likely. Thus, an advance from $32,300 to $32,800 would ensure a further test of the all-time high region and possible continuation to $38,000 and up to $42,000.