Buy the dip, sell the rip? BTC price levels to watch as Bitcoin makes $42k
Bitcoin (BTC) is facing an uphill battle to improve stability after its biggest one-day loss in 2023.
After falling to a low of $40,200 after the weekly close of December 10, the largest cryptocurrency continues to claw back lost ground, according to the latest data from Cointelegraph Markets Pro and TradingView.
With BTC's price action taking a break from the relentless gains – which many would argue were long overdue – new key support and resistance levels are coming into play.
The coming days are set to present many possible volatile triggers. US macro data releases begin on December 12, a day after the Federal Reserve's interest rate decision and comments from Chairman Jerome Powell.
The platform is set for a showcase that can include more than just crypto markets.
Cointelegraph takes a look at prominent BTC price lines in the sand now on the radar for traders and analysts as Bitcoin narrowly guards the $40,000 mark.
Bollinger Bands: BTC Screams “Considered”
While it has been painful of late, the 7.5% BTC price drop that followed the weekly close provided a reset for bearish crypto markets.
#Bitcoin is now down 7.5%, making it the biggest 1-day drop in 2023.
It surpassed the drop in March during the bank failure; -6.2%, down $20,000.
Also, Bitcoin is down -7.2% at $26,000. pic.twitter.com/WFYiyURO3J
— James Van Straten (@jimmyvs24) December 11, 2023
This was needed, the consensus agreed, because if left unchecked it would trigger a violent backlash.
John Bollinger, creator of the Bolling Bands volatility indicator, responded on X (formerly Twitter) saying, “It's overextended, so it had to pull back.”
“It stood up exactly as intended. That doesn't happen very often. Now we want to see if support can be maintained.
Bollinger cites data from Bollinger Bands, along with a corresponding chart that shows, among other things, the strength of recent reversals relative to recent BTC price strength.
On the daily timeframes, the dip took Bitcoin directly into the middle band in the Bollinger channel, which gave the correction something of a learning curve to move and create optimism going forward.
The weather is getting a bit colder here, but for now we are seeing signs of strength. We are out of daily and weekly BBs without exception. The last control formation on November 21 $BTCUSD was completed with a 2-bar reversal in the center BB.
— John Bollinger (@bbands) December 5, 2023
Meanwhile, Bollinger warned of increasing tightening conditions a week ago, which could already be a major warning in the area.
Big Bitcoin buyers can play “buy the dip, sell the hole.”
Looking at the behavior of large traders, some analysts see encouraging signs after the flow of demand opened by the dip.
Posting the BTC/USDT order book liquid publication on the largest international exchange Binance overnight, trading inputs material indicators showed a new support group at $38,500.
Despite both being below $40,000 and this week's low, material indicators suggest that “institutional-sized” bids may now return – but there may be a caveat.
The accompanying analysis concluded that “it is not yet clear whether they are beginning to accumulate legitimately at these levels, or whether they are buying and selling dips.”
“After all, we have the Fed Rate Hike decision coming up this week and #JPow talks are typically good for some volatility,” he added.
Skew, a popular trader that continued on December 12, similarly considered the possibility of manipulation among large players.
“Seeing a slight shift in the mindset of the big space players who were actively chasing price before,” he told X Followers about the Binance Order Book.
“The current thinking is to buy the dip and sell the dip until the bid depth is reached and liquidity improves for a large capital return.”
Skew puts the key BTC price areas to watch at $38,000–$40,000 and $44,000–$45,000.
Analyst: Bitcoin is greeted in “new territory” every year
In terms of major support, popular trader Ali said the $38,000 range is a major barrier against major downside.
Related: Price Analysis 12/11: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX
“On a deep correction, Bitcoin will find strong support between $37,150 and $38,360. This zone is supported by 1.52 million addresses holding $534,000 BTC,” he said alongside the data.
“Also watch out for two resistance walls that could push BTC higher: one at $43,850 and another at $46,400.”
Michael Van de Pop, founder and CEO of MN Trading, meanwhile, lowered his floor zone slightly to $36,500.
He believes Bitcoin should end 2023 in “new territory.”
Critical levels to hold for #Bitcoin are $36,500-$38,000 on the upper timeframe.
With this correction we will see $39,500-$40,000 return to the $42K+ mark. #Bitcoin may form a new range before the end of the year. pic.twitter.com/bmQIREzEW8
— Michael Van de Pop (@CryptoMichNL) December 11, 2023
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
