Green Support At $27,000: Bitcoin’s Key Level As Retrace Looms
Bitcoin (BTC) remains in consolidation mode, trading within a fully formed range between $27,500 and $28,000. While the cryptocurrency has been unable to break through its toughest resistance wall, it has found solid support at the $27,000 level.
While the support level at $27,000 has given bullish traders hope for another attempt to reach the $30,000 mark, the potential for a retrace to find bullish momentum and strength to breach the higher high resistance still looms.
A Matter Of Time Before Bitcoin Sweeps The Lower Levels?
Bitcoin may face a potential pullback and test support levels at $27,000, the previously gained support of $25,200, or even lower. However, there is still a bullish scenario for the cryptocurrency despite these short-term fluctuations.
The $25,000 support region aligns with the 50-day moving average (MA). This provides a significant threshold to prevent further declines and could serve as a bounce-back point for Bitcoin to reach new highs.
On the other hand, crypto analyst Justin Bennett believes that Bitcoin will eventually retest the $20,000 price level, regardless of whether it makes another push toward $30,000 in the short term. Bennett suggests that is simply the nature of Bitcoin, which is known for its high volatility.
The chart above shows that there is currently a significant amount of liquidity available below the $20,000 mark, specifically within the range of $18,000 to $19,500. While this liquidity could fuel Bitcoin if it retraces to those levels, it poses a potential risk for the cryptocurrency.
BTC At A Critical Moment
According to crypto analysis firm Material Indicator, Bitcoin’s current price range is marked by a “ladder” of ask liquidity, descending from the $29,000 to $30,000 range to the active trading range. This suggests significant selling pressure at the higher end of the range, preventing Bitcoin from breaking above the $30,000 resistance level.
On the other hand, Material Indicators have identified new bids appearing around the $27,600 level, indicating support to maintain the current range and make another attempt at reaching $30,000. This suggests that there is still a bullish sentiment in the market, despite the current range-bound price movements.
According to the analyst team at Material Indicators, Bitcoin has made three failed attempts to surpass the higher high resistance level. However, despite these attempts, there has not been a confirmed breakout or breakdown from the current price range. The price has been rejected at various points, resulting in choppy price movements within the range.
Overall, the appearance of new bids at this level indicates that some investors are willing to buy Bitcoin at this price, which can help provide support and potentially drive the price higher, which will confirm the new trend of Bitcoin and further confidence in BTC.
Bitcoin is trading at $28,100, almost trading neutral with a decline of 0.3% in the last 24 hours and 0.2% in the last 7 days.
Featured image from Unsplash, chart from TradingView.com