Bitcoin volatility rises as traders anticipate BTC's next move
Bitcoin (BTC) is facing increased volatility as the new week begins, with traders closely watching the price action at $42,000. The largest cryptocurrency experienced gains of over 10% during the weekend, leaving traders uncertain about its future trajectory. The question now is whether this recent move signifies the start of a new trend or a potential bull trap. Market appraisals differ, with both bullish and bearish perspectives vying for validation.
The important support and resistance levels in play
Following recent BTC price performance, the market landscape has shifted, prompting a closer look at the key support and resistance levels. BTC/USD is currently trading around $41,600, having reached a 19-month high of $42,160 earlier in the day. Trading resource Material Indicators points out that significant buy support is concentrated at $41,500 and $40,700, while sell pressure above the spot price appears limited. This suggests that large-volume traders have been actively selling into the rally, possibly in an effort to distribute their holdings.
Bitcoin whales play a role in market movement
Bitcoin whales, or large holders of the cryptocurrency, have been instrumental in shaping recent market movements. Material Indicators suggests that these whales have been attracting bid liquidity to the range, allowing BTC to continue its climb. However, once buy walls disappeared, selling pressure increased, resulting in $86 million being sold off in just 30 minutes. The analysis also points out that a new block of bid liquidity worth $30 million has arrived, potentially indicating that the party isn't over yet.
Historical price levels remain significant
Zooming out, historical BTC price levels continue to hold psychological importance. Scott Melker, a trader and analyst, emphasizes the significance of $42,000, which acted as both support and resistance multiple times since its creation. Other notable price points include $31,860, $28,050, and $25,200 as support and resistance levels since 2021. On the upside, traders are paying attention to $48,240, $51,790, and the all-time high of $69,000 as psychologically relevant resistance levels.
This article does not provide investment advice. Readers should conduct their own research and exercise caution when making investment decisions.