It seems like there has been no end to the drop in the price of Bitcoin BTC/USD since the high of November 2021, slumping almost 60% during that time. May, so far, has brought a 14% drop, taking the price back to the June 2021 level of $30,000.
The price of the daddy of the cryptocurrency world is now at a very interesting level — one that could hold firm and give momentum back to the bulls.
Below is the weekly time frame.
I have added the major support and resistance levels, clearly showing the price has been trading inside a long-term range (also known as a consolidation or sideways market). The high is from April 2021 and the low is from June 2021.
The 135% bull run from June 2021 to the all-time high of November 2021 failed to see the price breakout of this consolidation and push beyond the $70,000 round number. Instead, November formed a fake breakout, and the price has since fallen, remaining inside consolidation.
What makes trading consolidations notoriously difficult is this whipsaw movement in the price. This is where patience comes in, ideally.
The positive is the expression; the longer the consolidation, the bigger the breakout. When the price does break out to the upside, we are likely to see a sustained period of growth, with $100,000 a very likely target.
When that occurs is down to the market forces.
So the question is, what's next for Bitcoin?
If the June 2021 levels hold strong, we will see the price continue to consolidate until the bulls come in and take the price back to the all-time high. We know this can occur in weeks when momentum kicks in.
If the price breaks through the June 2021 support level, it is likely to target the weekly 200 simple moving average as the next support area, which has not been tagged since the COVID-19 declines in March 2020. Note how it held firm as support, and the price the. went on an 1,100% bull run.
During these periods of uncertainty, I prefer to remain on the sidelines and wait for the good times to present themselves again, and they will. It is just a matter of time.
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