The price of Bitcoin has decided to take a breather as the ups and downs struggle to take control in the $18,200 to $19,500 range.
After an impressive rebound to a new all-time high on December 1, the price of Bitcoin (BTC) seems to have entered a small consolidation phase, as the price ranges from USD 18,200 to USD 19,500.
How high can the price of Bitcoin go?
The 1-hour and 4-hour charts show that the price is compressed into a pennant like structure, and when it exits the pattern, the price is likely to move to the $19,400 level, where there’s a little more resistance.
The breakout of the flag would also suggest that the $19,000 level could now act as solid support and if the bulls can turn the $19,400 to $19,500 area into support, we could expect an attempt to break the new all-time high.
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As many analysts have pointed out, periods of consolidation and reversals where the underlying support is retested are of vital importance in maintaining the strength of an uptrend.
In addition, if Bitcoin is truly in a bull market, investors will see both larger and smaller reversals as ideal buying opportunities. Clear evidence of this can be seen in the daily chart which shows traders buying on every significant drop since mid-October.
We can also see that the pattern of higher daily minimums is intact even after the most recent strong rejections at the level of USD 19,000.
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If the Bitcoin price does not exceed $19,200 or drops below the $19,000 level, the visible range of the volume profile (VPVR) shows support at $18,650 and below at $17,800. The $17,800 level is also aligned with the 20-day moving average, a metric that has been respected since The upward trend began last October 7, when the price of Bitcoin was USD 10,600.
According to Cointelegraph contributor Micheal van de Poppe:
„It is very difficult to make an analysis at this point, but the longer time frames indicate that there is an overextension at this point. If Bitcoin doesn’t break or close above $19,000, I think we’re going to reverse it.
Van de Poppe also suggested that in the weekly and daily frames the crucial area to keep is the $19,000. He warned that a possible bearish divergence could be hinting at a short term reversal.
What happens if the bears take control?
In the event that the Bitcoin price takes a bearish turn as it falls from the current range and loses the $17,800 support in the 20-day moving average, you may be able to re-test the 23.6% Fibonacci retracement level at $16,100.
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The VPVR in the daily frame shows an interest of about USD 15,700, but as mentioned above, the price has respected the 20-day moving average since the beginning of October.
It is also clear that retail and institutional investors have shown a strong interest in buying during the most significant declines, so it seems unlikely that this trend will end even if BTC loses the current range.
The views and opinions expressed here are those of the author alone and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, so you should conduct your own research when making a decision.