The Bitcoin price is once again breaking ground above $40k. Both the bulls and the bears have a fight on their hands. But which camp will claim victory?
Bitcoin (BTC) is trading at $40,520, down $800 (-1.90%).
The cryptocurrency market has been in limbo for the last two weeks as BTC tussles with the elusive $40,000 threshold. As was the case when the price was at $30,000, what happens here has wider implications for the market as a whole. And both sides will claim the recent price action supports their view.
So far, the $40,000-$43,000 range has done a good job of repelling the price. However, despite not extending higher, the Bitcoin price is finding support on the dips. And yesterday’s reversal from $37,900 has led to a fresh assault on the resistance.
At some stage, either the buying will absorb the selling or sellers will outnumber the buyers. And when that happens, it’s likely the price will have a material move. But for now, the battle is ongoing.
The Bitcoin price polarizes the market. For the most part, investors either believe BTC is trading at a fraction of its value or that it has no value at all. This results in extreme price forecasts from anywhere between $0 and infinity. But the reality is, how BTC performs at $40,000 could provide the catalyst for a 50% move either way.
The daily chart shows three important trading bands.
Firstly, the area between $28,700 and $30,000 should be considered the long-term support essential to BTC maintaining its uptrend.
This brings us to the recent range between $37,500 and $43,000. I consider this the pivot. Should the price drop out of this channel, it would ultimately target long term support.
However, a convincing upside clearance targets the third important trading range.
In the three months between February and May, the Bitcoin price made several forays above $60,000. Of course, we all know that this range eventually gave away, leading to BTC more than halving in value.
Therefore, shockwaves of the price action in the coming days and weeks could be felt for a long time to come.
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