Since last week, the price of bitcoin (BTC) has not stopped recording new all-time highs. However, as is known, no upward trend is in a straight line, especially for this asset that has so much volatility. Therefore, it is crucial to be prepared for possible relapses.
Even if bitcoin were to continue in a sustained bullish trend these days, it is expected to return to near levels to test support. Therefore, it is vital to keep in mind that a fall does not mean weakness. In fact, far from it, it implies a healthy movement of the market to form a firm floor that allows it to continue rising.
In this sense, a fall should not be a cause for fear for traders, especially if one keeps in mind what prices it could fall to. In this way, you can be aware of which levels could be a brake in the event of a setback.
To identify the prices to which bitcoin could fall in a pullback, it is advisable to analyze the latest resistances it has had.. What is this? The prices that, in recent times, have temporarily functioned as maximums due to greater supply than demand.
Due to the psychology of traders, during uptrends, the market tends to convert recent resistances into supports. This term represents the opposite, that is, a temporary area of minimum prices due to greater demand than supply. Therefore, having these levels identified is key to predicting possible price continuity.
With Donald Trump’s victory in the US presidential election last week, bitcoin overcame strong resistance. This is 73,000 dollars (USD), a level that it touched for the first time in history in March and, in the following seven months, it functioned as a barrier every time it approached, as the graph shows.
In this sense, It is highly likely that the area around USD 73,000 will function as support in case of a relapse. Although it is even possible that the market looks for lower levels before forming said area into a floor.
Next supports for bitcoin price
It would be reckless to think that bitcoin will not return to the range it held for the past seven months before last week’s breakout. In this period, different levels have functioned as resistance on multiple occasions, so it would not be surprising to test support.
Among them, The area around USD 69,000 is distinguishedwhich in addition to having functioned as resistance at times in recent months, was the maximum peak of the bullish cycle of 2021. Therefore, as seen below, it is a psychologically strong area that the market could repeat and try to convert as a floor .
Furthermore, other points such as the levels near USD 65,000 and USD 60,000 have acted as temporary resistances both in this cycle and the previous one. And, being round numbers, they have an additional psychological burden that can attract demand, turning the sector into support, as happened sometimes this year.
Therefore, as the following graph shows, these levels seem the most likely in the event of a pullback, according to technical analysis. However, Faced with a deeper fall, something that today seems unlikely, it is possible that at most it will touch USD 49,000.
Bitcoin below USD 50,000? Unlikely
The USD 49,000 level has functioned as the floor of the consolidation range that bitcoin has carried in the last seven months. Therefore, it has been proven as a solid support that could act in such a way again in the event of a downtrend. Furthermore, this area also acted as a support-resistance level in the last bullish cycle.
Nevertheless, the possibility of such a deep fall now seems nilwith the strength that the market is showing. The price of bitcoin reached almost USD 85,000 today, setting a new record.
This coincides with the time when bitcoin usually enters a bullish period of about a year after the halving, an event that reduces the issuance of bitcoin by half every four years. This can be seen below.
Therefore, if this pattern continues, it will continue to rise, beyond any setbacks to key levels that it may perceive. This also occurs in the fourth quarter of the year, a historically green period for the markets as the table shows, which suggests optimism.
Trump’s election victory last week, which promises to boost the cryptocurrency industry and have national reserves in bitcoin, has fueled this scenario. Added to this was also the second cut in interest rates in the economic powerhouse, something that increased the liquidity available to the markets.
Bitcoin falls may be an opportunity
With the current panorama, various specialists predict that the price of bitcoin will reach USD 100,000 this year or next. As reported by CriptoNoticias, this would imply an increase of only 25% from its current value, a small percentage in relation to its typical volatility in bullish trends.
In this sense, a rise to $100,000 today seems more likely than a fall to $49,000which would be a 42% correction from the current price. Therefore, those looking for lower prices to buy bitcoin should consider that such a deep decline may not occur in the short term, although smaller ones may.
Keeping these details in mind is key to identifying potential opportunities to accumulate bitcoin in the face of bullish expectations. However, as with any investment, it is essential that everyone does their own research and does not invest more than they are willing to lose to avoid unwanted scenarios.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.