Bitcoin makes a fresh run at $45K; other tokens follow

Posted: 8 February 2022 3:22 pm
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Bitcoin pushed past $45,000 briefly before dropping off. Staying above that mark could mean the selling pressure has subsided.

In the latest rally to a key price level, Bitcoin touched above the critical $45,000 on Tuesday, then pulled back to about $43,000.

This again put Bitcoin between two technically strong price levels that many investors are watching: $40,000 and $45,000. A sustained move above $45,000 would suggest more gains ahead; dropping below $40,000 could mean more selling.

How high can Bitcoin go?

I outlined Bitcoin’s (BTC) price levels in a recent article where I said that $45,000, a previously strong support zone, has now turned into a resistance zone. A resistance zone means a ceiling, where more investors sell to take profits, or short the cryptocurrency, than are buying. This makes it hard for the price to move higher.

To break a strong resistance level, we need just as strong a catalyst, either in the form of some fundamental change like crypto regulation by the Securities and Exchange Commission (SEC) or renewed buying pressure from whales and retail investors.

If Bitcoin manages to push past $45,000 and hold, the next resistance level is $50,000. This zone coincides with the 100 moving average on the daily chart of Bitcoin prices, which acts as another resistance level. A break of these two levels would pave the way for another try at Bitcoin’s all-time high at $68,000.

Bitcoin Graph

Source: StockCharts.com

This doesn’t mean it can’t pull back

Despite showing signs of bottoming out on the daily chart, the weekly chart shows the downward pressure still stands. In this case, the first support level is $40,000, which — aside from being a round number — coincides with multiple moving averages converging at the price. This could prove a decent support level from which Bitcoin can bounce off.

This is the point where buyers have recently outnumbered sellers. These points do change — or break.

A breakthrough at the $40,000 level opens up the way for retesting the $35,000 support level and subsequently $30,000 as the main support level.

Altcoins follow

In the past few months, altcoins have followed whatever Bitcoin does. Bitcoin gained 14% in the past seven days. Ether (ETH), the second cryptocurrency by market cap, gained almost 13%, while Binance Coin (BNB) and Dogecoin (DOGE) gained 11%.

Kliment Dukovski owns Bitcoin, Ether and Binance Coin as of the publishing date.

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