The bitcoin price is showing significant strength as bitcoin (BTC) is up over 60% in six weeks, climbing from $ 10,000 to $ 16,500, leaving many investors behind.

These investors were waiting for the deficit of the Chicago Mercantile Exchange to close at $ 9,600, but this did not happen. However, can the markets expect a correction or will the markets continue to strengthen?

Bitcoin publishes sixth weekly green candlestick in a row

1-day BTC / USDT chart. Source: TradingView
The daily chart shows some important levels to look out for. If Bitcoin price continues its upward momentum, the previous resistance area should be reversed to find support.

A similar example appears in the previous breakout at the $ 13,200 level. This area acted as resistance before the breakout, but immediately turned into new support. This support / resistance change required an additional continuation up to $ 16,500.

The $ 15,500– $ 15,700 area has the same construction value as the previous $ 13,200 area. The persistence of the $ 15,500-15,700 area means that the uptrend may continue and the breakout confirms bearish divergence, which should push the price down. This bearish move could push BTC down to $ 14,000.

The weekly chart shows the exact $ 12,000 resistance level that was broken six weeks ago. The next area of ​​strong resistance is between $ 15 750 and $ 16 500, which was reached last week.

However, will it continue after such a massive boom? One argument is that there are still many undefined levels below the current spot price where liquidity can be found.

What’s more, sentiment has shifted from bearish to cheerful bullish as more institutions benefit from bitcoin, so the pullback shouldn’t come as a surprise.

As shown in the chart, the correction to $ 12000, which was previously a critical level, may continue. This level was breached after two years of retention. However, this area has not been retested.

Investors and traders should view this level as an interesting potential entry point.

The fear and greed indicator speaks of a warming market
The Crypto Fear & Greed Index measures various variables to gauge the current market sentiment, which is still 90 out of 100. This level is considered extremely greedy.

An indicator of fear and greed in cryptography. Source: data on digital assets.
Previously, this level was reached only once. The first was the pinnacle of the June 2019 bull run.

Of course, this is not a completely reliable indicator and traders and investors should not blindly predict their strategy based on this single indicator. However, it provides a useful insight into the current euphoria in the market.

Given that FOMO – the fear of missing out – is in effect, the amendment will put everyone on their feet again. As mentioned earlier, such a pullback would actually be very beneficial for an overheated market.

Monitoring levels on lower timeframes

The 4-hour chart shows a distinct bullish trend since the $ 10,000 breakout. However, there are several important levels that need to be maintained in order to maintain this momentum.

The red square indicates higher liquidity as a result of the recent rally. To continue the rally, there must be a clear breakout into this resistance zone as the $ 16,500 area immediately reverses in search of support. Otherwise, the breakout is likely to turn into an illusory exit and simply a liquidity challenge before the market reverses.

As discussed earlier, further gains should be held at $ 15,600-15,750, with the next significant area of ​​resistance at $ 17,500. If this area is not considered support, the next support area would be between $ 14,800 and $ 15,000. A potential bearish reversal towards support / resistance in the $ 15,600-15,800 area is likely to lead to further declines.

If that happens, the following areas of support are likely to range from $ 13,700, $ 13,900, and $ 12,800 to $ 13,200.

Source: CoinTelegraph