Bitcoin continues to rise with a recent break above the 50,000 price level. However, many investors are looking at Bitcoin removing 51K as the next hurdle. That said, if we expect Bitcoin to work better, we should take into account recent support levels, along with the volume patterns seen earlier this year.
For support levels, the 200-DMA is a major moving average at 46K. However, since Bitcoin has operated several times through the 200-DMA, the best current support level that remains is 44K from the 8/19 low. Although Bitcoin has been on an upward trend, there have been several small setbacks in the last month, each without any significant increase in volume. The volume has also been lower compared to the initial push towards the 50,000-kilometer price range dating back to February 2021.
Much of the decline in volume could be from months of consolidation that Bitcoin went through and therefore gave investors and institutions the opportunity to slowly load the currency. That said, if Bitcoin continues higher, it will enter a turbulent zone of 50 to 60 K. This can be difficult to achieve at the current average volume and will likely require large buyback gains to advance past resistance.
If buying does not accelerate, instead of entering volume of more purchases, it could be in the form of selling for greater volatility. However, this does not mean that Bitcoin would be sold completely. Instead, the purchase could go down, as seen at the beginning of the year, after a quick correction.
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Deputy Director of Research and Education in Trading