Bitcoin continues to thrive and the price is constantly reaching new heights. Yesterday the price even shot up to $ 38,000, a price level that Bitcoin has not seen since May 2022. Euphoria is clearly coming back into the market and everywhere on Twitter you see predictions about a 40,000 or even a 50,000 dollar Bitcoin.
However, it is important to remember that this is often the first reaction of investors after such a big rise: the tendency to think that there are no limits and the ‘sky is the limit’. Although this sounds attractive, it is mainly emotional. In such moments it is crucial to keep a cool head and take profits, especially now that Bitcoin is approaching major resistance on the weekly chart.
Bitcoin encounters resistance
The largest cryptocurrency has been in the green for four consecutive weeks. Whether there will be a fifth is not relevant at the moment. Because let’s be realistic: we are really dealing with heavy resistance around this price level. We already saw this, for example, when the price reached $38,000. Within minutes the price was $2,000 lower. If Bitcoin closes the weekly candle in the red box, it is very possible that we will end up in a correction or downward movement in the coming week.
When the price starts to correct, I will keep a close eye on the $32,000 price level. This level has provided resistance on the weekly chart for months, but has not yet been tested back as support now that the price has shot above it.
The short term chart
Another short-term graph for those interested. The image below shows the 30 minute time frame, meaning each candle represents a 30 minute period.
Bitcoin is making higher highs and higher lows on this chart, driving the price into a tailspin. This pattern is also called a rising wedge and often has a downward price target. The reason why the price will most likely correct on this chart has not only to do with the pattern, but also with the declining volume. While the price rises, the volume continues to decrease. This indicates a lack of buyers, and is often an indication that the trend is reversing.