Home Stock Markets If Bitcoin Bulls Want to Party, the Crypto King Must Clear a Key Level

If Bitcoin Bulls Want to Party, the Crypto King Must Clear a Key Level

by WOOWinvest
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If Bitcoin Bulls Want to Party, the Crypto King Must Clear a Key Level

Stocks were strong Friday as bulls looked to end a five-day losing streak for the S&P 500.

Help lead the way? Risky rally for cryptocurrencies.

When I look at the market, I look in segments. The S&P 500 is a large-cap index, but there are clues elsewhere. Small caps, growth stocks, tech stocks and Bitcoin are all sectors to watch in the market to see where investors are taking risks.

When investors take risk, they can signal a broader rally. The top cryptocurrency is rising for the third time in a row as it relates to Bitcoin.

From Wednesday’s low to today’s high, bitcoin prices are now up more than 11%. But bulls should beware: The cryptocurrency king is not out of the woods yet.

After breaking below key support levels last month, Bitcoin has been surprisingly calm as it trades in a $3,000 range between $18,750 and $21,750.

Traders moving in and out of Bitcoin must respect support and resistance areas. If there’s one thing that’s obvious in 2022 — of all assets — it’s that technology can help keep investors out of trouble if they bail out after support fades.

So what does Bitcoin need to do to get the bullish party going?

trade bitcoin

Bitcoin daily chart.

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The previous “breakout top” came into play around $19,500, but this was not a huge factor as Bitcoin fell below this level.

After doing so, it found a low of $17,600 and has been making higher lows since. Having said that, resistance at around $22,500 has come. In order for the bulls to enjoy a long-term rally, Bitcoin must reclaim this level.

Many key measures come into play at or just above this level. Between $22,500 and $25,000, there are 200-week, 10-week and 50-day moving averages.

On the upside, Bitcoin is making a series of higher lows and is trading above the 10- and 21-day moving averages.

From here, it needs to move into the $22,500 area. If it can clear $25,000, that could clear the way to the $29,800-$30,000-plus area.

A word of caution, though: Watch for uptrend support (blue line). If it loses this level, it will replay $18,750. A break above this level opens the door to a move back to the 2022 lows.

If you need a reminder of what happens when you break uptrend support in a larger overall downtrend, just look at the previous example on the chart.

From $40,000 to $26,000 and $30,000 to $18,000.

Keep it in your head.

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