The price of Bitcoin (BTC) has risen steadily over the past few weeks, hitting its most recent new high of around $ 57,500 on February 20.
This week there was more positive news such as the first company listed on the German stock exchange to distribute its cash reserves to BTC, as well as the launch of the first Bitcoin ETF in Canada, which traded over $ 220 million on its debut.
Just for a day
– Elon Musk (@elonmusk) February 19, 2021
Such news drives the price of Bitcoin soaring, while Elon Musk has also adopted the latest “Laser Eye” meme, to the delight of hodlers who are itching for a BTC price of $ 100,000. However, the next major point of interest is around $ 63,000. This could be achieved relatively soon if Bitcoin can be above some key support levels.
Bitcoin continues its rally by holding critical levels
XBT / USD 4 hour chart. Source: TradingView
The four-hour chart for Bitcoin shows a clear upward trend as it has broken out of the range between $ 30,000 and $ 42,000. Since then, key levels of $ 44,000 and $ 50,000 have been held as support, which acted as a launch pad for the current highs above $ 55,000.
This run is also driven by the falling stock market reserves. This is very similar to late 2016, when more Bitcoin was withdrawn from the exchanges than was deposited. These withdrawals mean that people want to hold their Bitcoin for the long term, which indicates strong demand and low time preference.
During the last rally, the first Fibonacci level was hit at 1.618. Now Bitcoin is approaching the second point of interest at the Fibonacci level of 2.618 around $ 63,000.
On the flip side, the $ 50,000 level on the four-hour chart is crucial. If this gets the support, there is a high chance that Bitcoin’s price will hit this level next. However, if it loses $ 50,000, expect another downward trend to $ 43,000.
The total market cap for crypto hits $ 1.7 trillion
Cryptocurrency with total market capitalization 1-week chart. Source: TradingView
Meanwhile, the market cap for cryptocurrencies is approaching the $ 2 trillion mark during this cycle, which many people would not have expected in the past year.
However, after breaking the 2017 all-time high, the next interest rate level was the $ 1.2 trillion level, which is also the 1.618 Fibonacci area.
This zone has been breached on the upside and market capitalization is now targeting $ 1.85 trillion, the Fibonacci level of 2.618. The graph also shows a massive gap between the 21 week MA and the current price, suggesting that the rally may be overstretched.
Historically, late February and March have not been bullish on the market so a correction should come as no surprise. In that case, there is definitely another test of $ 1.2 trillion on the table.
Decisive levels for the BTC price
XBT / USD 4 hour chart. Source: TradingView
Trading is about holding critical support levels for further up or down momentum. In this case, the first key levels are between $ 43,000 and $ 44,000 and the second is $ 50,000.
However, the same is now true for the $ 55,000 level in low time periods, especially the 1 hour candlestick chart. If this is lost there will be a gap to the next area of support, which means a breakdown to the $ 50,000 level is expected.
However, as long as it holds $ 55,000, the price of Bitcoin is not much holding back from hitting the next Fibonacci level at $ 63,000.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trading step is associated with risks. You should do your own research when making a decision.
