Short

Bitcoin(BTC): $40K Psychological Resistance Is Like A Magnet

Updated

Bitcoin's monthly timeframe reveals cautious growth as we approach the psychological 40K resistance zone. We still wait and want to see that the pre-halving period will show us some downward movement (historically, last time we had a similar setup, prices dropped 60% of the market price).

What we are going to do right now is monitor the price action near the 40K zone and see if we will secure it within the monthly timeframe or if we will see a nice rejection! But If 40K won't show any strong rejection but more of a small rejection, then the price might just as well pass this 40K zone and move to the upper zones.

So as of now, we are still seeing and waning for some kind of weakness near the 40K zone and a first correction to happen towards the 32K zone.

Swallow Team

Note

The new week has started with a magnificent breakout (breaking the 40K zone without any significant resistance).

During the Asian trading hours, Bitcoin has had a breakout from the 40K zone and is currently aiming for the 41.5K zone. As many (including us) waited for some major rejection to happen near 40K, it came to the conclusion that we needed to wait for at least London trading hours to open in order to see how it would be moving during that time there!

P.S. We are not passing completely on the idea of correction (which historically showed same setup as we are seeing right now and Resulted in a nice 60% downfall before the actual halving happened)

On a weekly timeframe, we want to see how the weekly candle will close this week, but the opening of the candle is rather bullish as of now. Eyes open for a potential fakeout of a long squeeze to happen!

Note

Bitcoin has reached a value that has not been seen for very long. We are paying close attention to the RSI because it has entered a zone that reminds us of the last major correction before a big surge. It will be interesting to see how people react to this zone because this pattern seems to be a repeat of past patterns. It looks like the RSI is following the same path as previous movements that happened before the Halving event.

Note

Bitcoin's monthly chart is painting an intriguing picture as we edge closer to the April 2024 halving. The price is not only going for an attempt to test previous all-time highs but the RSI is echoing a pattern from the last pre-halving period, striking a pattern to be repeated with historical price movements.

As we see the RSI return to levels it last saw right before the drop caused by the halving, traders who have been in the business for a long time are on high alert for a possible repeat of history. The way the market is going now reminds us of the push before the halving.

P.S. Past performance does not always mean future performance, but the market is paying attention as so are we.

We will all be wise to consider the lessons of the past halving cycles, balancing optimism with a disciplined review of the RSI and price action.

Note

2nd Week

The second week is here, and we are still showing some strength in building up that overbought market and pushing the limits of Bitcoin.

Not only are we laving heavy masses of FVG zones down below to be grabbed, but we are also on the heatmap of Bitcoin, where the majority of traders have shifted to long positions, showing us a potential liquidation grab to happen sooner or later in lower zones!

With that being said, as we get closer to the April 2024 halving, two of the most reasonable movements can happen:
Plan A anticipates a bearish movement towards 26K zone while also filling all the FVG zones, where we will encounter nice support and a movement to potential new ATHs
Plan B It is similar to Plan A, but near support, we might see further weakness and a potential long squeeze to the lower zones before further movement to the upper zones.

Note

3rd Week

We are seeing a nice rejection happening near the $44,500 zone, where the last weekly candle closed with nice and good dominance from bears. With that being said, we are seeing the first weakness kick in since October 16th (2 months of straight green candles).

Now that the first weak link has accrued, we are seeing a nice start of downward movement, which can easily reclaim a lot of FVG zones on the lower timeframes, where also the majority of liquidity is!

Start is nice so let's see if we can keep it up from this point!

Note

4th Week

For the last 21 days, the price of BTC has been held back by that major resistance zone at 45K, which is giving us a small clue that the volume of buyers is decreasing, and with every new weekly candle, we see that they find it harder and harder to break that resistance.

With the amazing pre-halving pump markets have had so far, we see the dominance of BTC getting back on its feet (with the fact that yesterday's small drop resulted in some major moves on alt coins).

We are still seeing a nice breakdown happen to reclaim those major liquidity zones at 34K and 26K as well. Be safe and trade smart; this week will be hard on many traders, for sure!

Swallow Team

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