Bitcoin recently experienced a significant rejection, prompting a notable bounce that directly hit our resistance level. In today’s Bitcoin price prediction, we’ll delve into a chart that suggests a potential downside move. Despite the recent hurdles, Bitcoin has shown resilience, forming a higher low around $41,000 and breaking a diagonal area of resistance in our standing channel.
The recent push towards the upside, approximately 4%, can be attributed to the formation of a bullish divergence. Despite selling pressure indicated by the CVD (Cumulative Volume Delta) indicator, Bitcoin maintained higher lows, signaling a potential reversal. This move, however, faced a strong rejection at a critical resistance level, resulting in the liquidation of approximately 13 million short positions.
Analyzing the current scenario, Bitcoin is teetering at a crucial resistance level. Repeated retests of this level increase the likelihood of a successful breakout. However, caution is advised as we approach the resistance, especially considering the formation of a weekly timeframe area of resistance at $43,800.
The recent rejection might not lead to an immediate downside move. Monitoring the reaction at the weekly level and liquidity levels around $43,500–$44,000 becomes crucial. A slight push towards the upside might occur, potentially hitting the weekly resistance. Observing the market’s response at this juncture, especially with increased volume, could indicate a temporary top for Bitcoin.
The overall price structure remains corrective, with the formation of an ABC correction pattern. The four-hour timeframe shows decreasing volume, emphasizing the corrective nature of the current trend. The potential formation of a C wave towards the upside suggests further corrective moves.
For traders, a horizontal range on Bitcoin is evident. If another rejection occurs, the range should be traded until a clear breakout is confirmed. Key support areas within this range include the daily value area low at approximately $41,400 and the point of control.
To maximize trading opportunities within this range, a short position can be considered, targeting the middle of the horizontal range, around $42,000–$42,500. However, going short means going against the trend, necessitating careful consideration of the evolving price action.
If the range breaks to the upside, traders must adjust their strategy accordingly. A push beyond $43,800 could signal a trend continuation, leading to higher targets for Bitcoin in the coming days.
Monitoring monthly returns reveals a historical pattern where November’s performance often foreshadows December’s movement. Currently, December is displaying positive gains, aligning with the historical trend. Additionally, a bullish cross on the one-hour timeframe’s exponential moving averages reaffirms the uptrend, although resistance levels demand heightened caution.
Finally, Bitcoin’s recent price action suggests a potential for both upside and downside moves. Traders should stay vigilant, closely observing critical resistance levels, and adjusting their strategies based on market dynamics. As December unfolds, historical patterns hint at a positive trajectory, but prudent risk management remains paramount.
