Is Bitcoin Encountering Strong Resistance Near $16,000?
Bitcoin prices have been fluctuating close to $16,000 lately, continually approaching this key, psychological level and then falling back.
The digital currency climbed to as much as $15,973.08 today on CoinDesk, reaching a fresh, 2020 high, before declining.
At the time of this writing, the digital currency was trading close to $15,800, additional CoinDesk figures show.
By climbing to these levels, bitcoin has risen more than 100% this year and rallied more than 300% since mid-March.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
When explaining the digital currency’s recent price movements, several market observers provided technical analysis.
“BTC is powering towards the key resistance level of $16K after failing to breakthrough in the past week,” said Kiana Danial, CEO of Invest Diva.
Mark Warner, head of trading for London-based financial services firm BCB Group, also weighed in.
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“The $16k level ties up with the weekly close in the first week of 2018,” he stated.
“Given how little price action we’ve had at these levels, we see market participants looking at significant closes & psychological levels for guidance. So resistance around $17-17.5k & then $20k is expected,” said Warner.
As for what the digital currency will likely do in the near future, several analysts weighed in.
Constantin Kogan, managing director of Wave Financial Group, pointed out the formation of a bullish triangle, which is illustrated in the chart below:
“The Bullish triangle has formed, its outlines are imperfect, nevertheless, a breakout will soon follow,” he stated.
“The Power Balance indicator signals in favor of an upward breakout, most likely, a test of $16,000 with a downward rebound will follow.”
However, he noted that “in the next 6-7 days a correction to the 23.6% Fibonacci level is very likely.”
Danial also spoke to a potential retracement, stating that:
“Looking at the historical behavior of BTC/USD, we could expect a pullback should Bitcoin fail to confirm a break above $16K today.”
“Failing to break above $16K will get the BTC/USD to form a ‘Triple Top’ bearish reversal chart pattern,” she added.
“The key support levels it could fall back to are at Fibonacci retracement levels at $13,310 and $12K respectively,” said Danial.
“It’s important to note that even if Bitcoin temporarily tests above $16K, we could still see a pullback in the coming weeks,” she emphasized.
“However, our long-term view remains bullish, targeting $17,196 and $20K respectively.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.