- Bitcoin is holding a crucial support level at the $46,500 level
- Momentum has been chiefly negative since all time highs of $69,000 a month ago
- As long as Bitcoin stays over $42,000 a bull run is still in play
Bitcoin may currently look like there’s as much chance of it going to the moon as there curing coronavirus, but holders received good news yesterday when it managed to hold a crucial support level at $46,500. While upward momentum seems to be in short supply, the fact that it is holding a support dating back to February is at least a sign that it is not ready to give up the bull market just yet.
Bitcoin in Freefall Since $69,000
Bitcoin has not been showing any kind of strength since dropping to $42,000 over a week ago, with any breakouts being swiftly curtailed. This has led to the potential of a short term channel developing on a lower time frame:
If Bitcoin can continue to hold in this area for the rest of December then it will start to take on the appearance of accumulation before a potential run next year, as a level of $46,000+ does not constitute a bear market for Bitcoin.
The importance of the current level can be demonstrated when looking at its performance over the year:
As we can see, the current level offered support in March and May, support that was then overturned later in May and couldn’t hold in September either. It’s clear then that the fact that Bitcoin is currently treating it as support again is a very positive sign, although we can still expect some more fluctuations around it in the coming weeks, with $53,000 still the key level to overcome for a potential bull run.
$41,000 Next Level of Support
If the current level does not hold then the most logical place for the next support is the $41,000 region:
This range was tested with the plunge to $42,000 at the start of the month, but a gentle grind down to this region to really test investor faith can’t be ruled out. Reaching such a level would still be supportive of a bull run in 2022, and only a drop and a weekly close below this level would start the warning claxon sounding.