Site icon Coinrevolution

Is $10k Really the Next Significant Level For Bitcoin?

A common claim in the market is now that the $10,000 level is the next significant zone for Bitcoin. A symbolical and psychological level for obvious reasons. Still, it is important – especially in the crypto space – to question common knowledge. So is $10k really the zone to watch for now?

Many news outlets have, of course, pointed to the $10,000 level as signficant. Especially, this news site alone has written three articles in the past three days about the $10,000 level. Of course, we also have cast an eye on this level already. But now it is time to question this narrative. Bitcoin is reaching out to $10,000 rolls easily from the tongue. But is it true from a technical perspective?

Why Expect a Significant Resistance at all?

Bitcoin’s price has surged unexpectedly from around $4000 at the beginning of April now to above $8000. A rally of 100% already. The surge came mostly without any major dip until the bears questioned the $8000 level. However, the market proved that there is still more steam behind the rally, recovered from the dip fastly and formed higher lows. Naturally, the market wonders now when and where the next major correction will set in. A 100% rally in less than two months cries for a correction sooner or later. Before the last bullrun, Bitcoin tested the low – back then of about $150 – twice in 7 months. During that time Bitcoin doubled two times in price. All in all the bear market lasted 21 months as we showed in an earlier technical analysis. Therefore, assuming we are safely in the next long-run bullmarket could prove fatal.

The 10000 level in the past

During the last severe correction from the ATH. The $10k resistance level served perfectly as a resistance level for Bitcoin. A bit more than a year ago now, Bitcoin surged from 6400 to 10000 and declined than below the previous low 5800. So, we have proof that the 10k resistance already was a resistance which Bitcoin could not break before as you can see in (fig. 1).

However, we also have the contrary example. During the last bullrun, the 10000 level was not really decisive for Bitcoin’s price action at all. The real decisive momentum was a bit lower at around 9700. When Bitcoin formed two neutral Douji candles. However, at around that time in December a crazy FOMO set in which dragged the price in the course of just 2 – 3 weeks from below 10000 to almost 20000. But the 10000 resistance level did not prove significant at all. On the daily chart, the 10000 level was non-existant for Bitcoin.

So what can we say about the next significant level for Bitcoin?

The last two times Bitcoin moved to the 10k level it were first timers. Back in the bullrun of 2017, Bitcoin moved parabolically and it was hard to estimate when the FOMO would run out of its steam. During the following bear market, you could already analyze that the correction would likely go on. As Peter Brandt showed for example at the very beginning of the bear market. However, as the ATH is now behind us and Bitcoin is on the path to retrace to this level. We can use the Fibonacci retracement method.

The Fibonacci retracment lines (fig. 4) suggest that the real significant level is again the 9600/9700 level. Just as in November/December 2017 before the bull run. Now this is not necessarily a bullish signal. It just simply means that the significant price action is likely to occur at around this level. However, we have to see how the chart behaves at this level to judge Bitcoin’s further movement.

DISCLAIMER: This article does not represent financial advice and only serves educational purposes. DYOR

Click to rate this post!
[Total: 0 Average: 0]
Exit mobile version