Technical analysis of Bitcoin on the (weekly) frame:
We previously explained that technical analysis based on long-term frames helps us understand market movements better as an overall view of market trends, as well as building a long-term trading strategy.
1. The gray area - critical resistance:
Bitcoin faced strong resistance at the gray area starting from around $92,000 to $94,983. The price was unable to close above this area last week, indicating that there is strong selling pressure in this zone. If the price fails to break through this area and hold above it, we may see a downward correction in the upcoming period.
Potential scenario:
If the price continues to reject at this area and does not close above it by the end of the week, it is likely that the price will start to decline. The first target of this decline would be to test the blue upward trend line.
2. The blue upward trend line - strong support in case of correction:
This line represents the upward trend that started in mid-March. If the correction we expect occurs, the price is likely to return to test this line in the area between $87,000 and $88,000. This line represents strong support, and if the price fails to hold at it, the market may enter a deeper bearish phase.
Potential scenario:
If the price drops to this level ($87,000–$88,000), we may see a bullish rebound if this support is activated. This would be a good buying opportunity if signals from the market support this upward trend.
3. The yellow area - last line of defense:
The yellow area represents a critical support zone for Bitcoin. This area extends from $81,852 to $85,725. This area is the 'last line of defense' that separates the continuation of the upward trend from a market collapse. If the price fails to hold above this area and a weekly close occurs below it, this may indicate the beginning of a deterioration in the situation and the possibility of a larger price crash.
Potential scenario:
If a weekly close occurs below this area, we will see a larger decline, and the market may head towards deeper levels reaching $73,000 or lower. However, if the price continues to bounce at this area or if it is tested again and the price rebounds upward from it, this will maintain positivity in the market.
Summary:
Based on the previous technical analysis, we note that the price is currently in a sensitive position. If it fails to break and close above the gray area (resistance), we may witness a gradual decline towards the support level at the blue upward trend line. If this yellow area is broken, we will have a signal for a larger price decline.
Market positivity:
The market will remain positive as long as Bitcoin stays above the yellow area, with no weekly close below this area. This will give the market a chance to continue correcting in the upward direction after testing the mentioned support levels.
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