- Bitcoin has retraced after breaching its all time highs yesterday
- A pullback was anticipated after Bitcoin stalled at $67,000
- What are the support areas and where could Bitcoin go from here?
Bitcoin is in the process of retracing after breaking through its previous all time high and running to $67,000. Alts have responded with a corresponding move, but with Bitcoin having seemingly topped out in the short term, where are the areas we need to hold and where might Bitcoin be headed next?
Bitcoin Experiences Anticipated Pullback
Bitcoin has enjoyed a tremendous run from $40,000 to $67,000 in the space of just three weeks, so among the euphoria of hitting all time highs sits the knowledge that a pullback is not just imminent but healthy. The higher the move without a correction the sharper the correction will be when it comes, so a small pullback now will set in a higher high and higher low, signaling further bullish momentum.
When it comes to how far Bitcoin pulls back, we have some areas of interest:
As we can see Bitcoin has already tapped one of these around the prior all-time high of $64,000-$65,000 in which it is currently sitting. Below this Bitcoin can safely retrace to the $60,000 or or even the $56,000 area and still be well placed for continuation. Bulls don’t really want to see Bitcoin closing below $60,000 and certainly don’t want to see the prior higher high of $52,500 revisited.
One Way Ticket to the Moon?
Once the correction is over, where is it likely for Bitcoin to go next? For this we can use the Fibonacci extension tool to predict areas of probable resistance. In the short term the picture looks like this:
If Bitcoin only experiences a shallow correction then we can look to the 1.618 level just above $75,000 as a place where profit taking will likely take place, with $85,000 being a second target if Bitcoin rips through the 1.618. Such an action would precipitate a very harsh pullback, potentially back to the $75,000 level or further if there has been no significant retrace up to that point.
Looking further ahead we can start to see the potential of six figure Bitcoin during the current phase of the cycle:
Taken from the cycle bottom in March 2020, the same tool shows us that $120,000+ is very much possible given the stage of the cycle we are currently at, which is less than a 2x from here. Here again we can see the areas where profit taking will occur (as well as China bans, probably), but, for the first time, six figure Bitcoin is definitely on the cards.
There will be scares and dips along the way, but don’t get shaken out…and wait for the alt season that will follow.