After an impressive rise to a new all-time high on December 1, the price of Bitcoin (BTC) appears to have entered a short consolidation phase with the price ranging between $ 18,200 and $ 19,500.
The chart for both 1 and 4 hours shows price pressure in a pennant-like structure and exit from the pattern is likely to cause the price to move to the $ 19,400 level where there is a bit more resistance.
4 hour chart for Bitcoin against the dollar. Source: Trading View
A breakout of the flag may also indicate that the $ 19,000 level could now act as strong support and if the bulls are able to flip the $ 19,400 to $ 19,500 area to support it, an attempt to cross a new all-time high is expected.
And as many analysts have pointed out, periods of consolidation and pullback to retest the fundamental support are very important to maintaining the strength of the upside.
Moreover, if Bitcoin is truly in a bull market, then investors will view the big and small drawdowns as buying opportunities. The clear evidence of this can be seen on the daily chart which shows that traders have been buying on every major drop since mid-October.
Bitcoin Dollar Daily Chart. Source: Trading View
We can also see that the daily higher lows pattern remains in effect even after the recent strong rejection at the $ 19,000 level.
If the Bitcoin price fails to push past $ 19,200 or loses the $ 19,000 level, the visual range for the VPVR shows support at $ 18,650 and below $ 17,800. $ 17,800 is also in line with the 20-day moving average, a metric that has been observed since the uptrend first began on October 7 when Bitcoin was traded for $ 10,600.
According to Cointelegraph contributor, Michael Van de Pope:
“It is very difficult to do any analysis at this point but the higher timeframes indicate that there is some excessive expansion at this point. If the Bitcoin price does not break or close above $ 19K, I think it will pull back.
Van de Pope also suggested that the critical area on the weekly timeframe is $ 19,000. He warned that a potential bearish divergence could indicate a reversal in the short term.
What if the bears took control of the decline?
In the event that Bitcoin price takes a downward turn by dropping from the current range and losing the support of $ 17,800 at the 20-day moving average, then it is possible to retest the 23.6% Fibonacci retracement at $ 16,100.
The visual range of the volume profile on the daily timeframe also shows interest around $ 15,700, but as mentioned earlier, the price has respected the 20-day moving average since early October.
It is also evident that individual and institutional investors have demonstrated a strong interest in buying the big dips, so this trend seems unlikely to end even if Bitcoin loses its current range.
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