During the past week, bulls successfully maintained closes above the critical level of $85,000, effectively fending off bearish pressures. Although the Bitcoin price dipped again last week, the bulls demonstrated resilience by pushing the price back up to conclude the week at $88,656. The weekly chart has indicated consistent rejection from the lower trend line of the broadening wedge pattern over the preceding weeks. However, this trend line is notably low, leading to expectations that the price will breach it this week. Should this breach fail to occur, a further decline into the low $70,000 range may be anticipated.
Key Support and Resistance Levels
The bulls are encouraged to continue their momentum this week, progressing level by level as necessary. Initial resistance is identified at $91,400, followed by $94,000. A significant resistance barrier is expected at $98,000, with further strong resistance anticipated from $101,000 up to $108,000. A close above $108,000 would raise considerable doubts regarding the establishment of a long-term top.
The $84,000 support level has proven resilient, holding strong once again this past week. Should this level fail, the expected support zones remain unchanged. A first test of the $72,000 to $68,000 range is likely to provide initial support. A close below $68,000 may lead to a gradual decline towards the 0.618 Fibonacci retracement support at $57,000.
Outlook For This Week
Bears may be experiencing frustration due to their recent inability to break through support levels. This week, bulls are expected to intensify their efforts, gaining confidence from their success in holding support. Given the anticipated low market liquidity during the Christmas week, price movements could be muted. Nevertheless, large long-dated Bitcoin options set to expire on December 26th, with a maximum pain price of $100,000, suggest that the price may attempt to approach the $100,000 threshold this week.
Market Mood: Bearish – Although bulls are showing some resistance, they still must demonstrate positive price action to convince bears of their strength.
The Next Few Weeks
Bulls managed to prevent bears from breaching major support levels last week. If they succeed in overcoming resistance at $94,000 over the upcoming weeks, there may be potential for sustained upward momentum leading into the new year. A weekly close above $94,000 could propel the price towards $101,000. Continued upward movement may persist to $108,000; however, significant resistance is expected in close proximity to this level, making any strong rejection likely in the weeks ahead.
Terminology Guide:
Bulls/Bullish: Buyers or investors anticipating an increase in price.
Bears/Bearish: Sellers or investors predicting a decrease in price.
Support or Support Level: A price level expected to provide support for the asset, at least initially. The more frequently a support level is tested, the weaker it becomes, increasing the likelihood of a breach.
Resistance or Resistance Level: The opposite of support; a price level likely to repel the asset’s price, at least initially. Similar to support, the more often resistance is tested, the weaker it may become.
Broadening Wedge: A chart pattern characterized by an upper trend line that acts as resistance and a lower trend line serving as support. The divergence of these trend lines validates the pattern, reflecting expanding price volatility typically resulting in higher highs and lower lows.
Fibonacci Retracements and Extensions: Ratios derived from the golden ratio that relate to growth and decay cycles in nature, based on constants Phi (1.618) and phi (0.618).
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