- Summary:
- Bitcoin price continues in a tight range despite negative news coming from all around the world. Conservative traders might wait until a breakout comes.
Bitcoin price holds in a tight congestion area for over five weeks now. By the time it dropped from the 12,000 level, it had found support at the round $10,000 mark.
No matter what news comes out from the crypto market (and there were some interesting developments lately), Bitcoin holds its value above the $10,000 level. However, a breakout is imminent. Because the cryptocurrency keeps forming lower highs and higher lows, one of the two key levels is bound to break sooner rather than later.
What’s New on the Crypto Market
Last week the crypto market was stunned to find out that the U.S. government charged BitMEX executives with fraud. This is the world’s second-largest cryptocurrency derivatives exchange, and the charges are both civil and criminal. More precisely, BitMEX is accused of giving access to American traders to an unregulated trading environment.
This week the FCA in the United Kingdom announced it is banning crypto derivatives starting with 2021. The move comes to protect the customers that do not understand the true nature of trading derivatives and that the crypto market still lacks regulation.
However, regardless of the developments, both having negative connotations for Bitcoin, the cryptocurrency did not blink. Instead, it continued its consolidation.
Bitcoin Price Key Levels to Watch Next
The chart below shows the Bitcoin price congestion area in the last five weeks. The two key levels are obvious – $11,000 – $11,200 to the upside and $9,800 – $10,000 to the downside.
Conservative traders would want to wait until the Bitcoin price breaks either of the two levels before going long or short. The thing is that the series of lower highs and higher lows mentioned earlier is quite common during triangular consolidations. But this triangle can break both ways – up or down, so it is better to wait for the break before acting. On any break, consider placing a stop at the opposite key level and use a risk-reward ratio of 1:2.
Bitcoin Price Congestion
