While the bears dominated the price action early last week, the bulls managed to find strong support below $100,000. Bitcoin prices briefly fell below $100,000 on Tuesday, Wednesday, and Friday, but buyers intervened each day to push the price above $100,000 and avoid a daily close below this critical level. A modest increase over the weekend allowed Bitcoin price to regain support at $104,000 and close at $104,700. Heading into this week, we will keep an eye on the $109,400 resistance level to calm things down, with $111,000 looking like strong resistance if the price can break above it.
Current major support and resistance levels
The weekly 55 EMA at $99,000 provided strong support for every $100,000 price drop last week. The bulls rose through this level and topped the bull market support level at $96,000. Going forward, bulls will look for the 55 EMA to hold as support after a significant break from this level last week.
The 0.382 Fibonacci retracement at $109,400 will provide some resistance as the bulls look to mount an onslaught. Above this, the bears will look for the $111,000 daily control point on the volume profile to contain the bulls. Above this level, $116,000 will be the gatekeeper for the bears, and a close above this level will reverse the bias to the bulls. If the 0.618 Fibonacci retracement at $116,000 can be converted into support, the market structure looks decisively bullish. Bulls may see some resistance at the top of the expanding wedge pattern at $129,000 if it can regain support at $116,000, but they do not expect $129,000 to hold for long even if the price actually reaches that level.
This week’s outlook
Rumors are circulating that the US federal government shutdown will end this week. If both sides manage to resolve the filibuster, markets could be boosted this week. Bulls will look for the 0.146 Fibonacci retracement at $102,900 to hold as support on the daily chart from earlier this week to sustain the upward move. The daily chart may find it difficult to close above the 0.382 Fibonacci retracement at $109,400, even if it picks up a bit more momentum. Losing $100,000 this week would be very bearish and could test at least $96,000, with the price potentially crashing further to $93,000 and even below that to $84,000.
Market atmosphere: Bearish – Despite the strength shown by the bulls last week, if we are being honest here, the outlook is still bearish. The closing price of the weekly big red candlestick is still bearish.
coming weeks
The widening wedge pattern we have seen over the past few weeks has not broken down yet. Therefore, there is still a possibility that the bulls can push the price back to the upper trend line near $129,000. There is still a bearish bias here, but the pattern is still likely to fall at this point. $116,000 is a key level that bulls need to reestablish as support to push the price back to new highs. While the government shutdown wasn’t initially too bearish for the market, the lingering effects are starting to show. If the US federal government is indeed able to get back to work quickly, that should push the Nasdaq higher, which in turn should help provide support conditions for Bitcoin prices to recover some key resistance levels. An upcoming major macro bearish event is likely to end the Bitcoin bull market, so the overall situation needs to remain stable to foster further upside.
Terminology guide:
Bulls/Bulls: Buyers and investors who expect prices to rise.
Bearish/bearish: Sellers and investors who expect prices to fall.
Support or support level: The level at which the price of an asset should be maintained, at least initially. The more you touch the support, the more likely it will weaken and the price will not be able to sustain itself.
Resistance or resistance level: Opposite of support. A level where the price is likely to be rejected, at least initially. The more times you touch the resistor, the weaker it becomes and the more likely it is that you won’t be able to keep the price down.
EMA: Exponential moving average. A moving average that applies more weight to recent prices than previous prices, reducing the lag of the moving average.
Fibonacci retracements and extensions: The ratio is based on what is known as the golden mean, a universal ratio that relates to cycles of growth and decline in nature. The golden ratio is based on the constants Phi (1.618) and Phi (0.618).
Volume profile: An indicator that displays the total amount of buys and sells at a particular price level. The Point of Control (POC) is the horizontal line on this indicator that indicates the price level at which the most volume of trades occurred.
Widening wedge: A chart pattern consisting of an upper trendline that acts as resistance and a lower trendline that acts as support. These trend lines must move away from each other to validate the pattern. This pattern is the result of widening price fluctuations, typically with higher highs and lower lows.
This Post Bitcoin Ends at $104,700 After Rejecting a Fall Below $100,000. $109,400 Fibonacci Resistance Next first appeared in Bitcoin Magazine and is written by Ethan Greene – Feral Analysis and Juan Galt.
