Bitcoin’s Battle with Resistance: Trading Insights and Key Levels to Watch

Last time we talked about BTC finding support and bouncing off the diagonal support, forming a descending channel. The 50 MA on the weekly timeframe was also there, making it a strong support level. We also mentioned that we would need strong volume to break the $59-60k area, where the 50 MA and 200 MA converge. After that, the market turned choppy and got rejected, but the support at $57k, or the median of our descending channel, was strong enough to trap those who sold at that level. BTC managed to break through the $59-60k area and is currently trading at $63.2k.

So, you probably know where it's headed next—the top diagonal resistance, which could be around $64.7k, though it depends on how long BTC consolidates before making its next move.

Here are the possible scenarios:

BTC approaches the diagonal resistance with massive volume: In this case, it’s okay to enter the market because there's a low chance of a retest. However, we can't completely rule out a retest if there’s a breakout. The best strategy is to open a small position during the breakout to get early exposure, and then add more margin or place a limit order during the retest. Our stop loss for this strategy will be triggered by a clear rejection and a close below, indicating that BTC will trade back inside the channel. The targets here are $70k and the top of the channel at $73.8k. We should also keep in mind the old resistance or psychological levels at $65k, $67k, and $69k.

If the volume is weak and BTC gets easily rejected: In this case, we should wait for a clear rejection before acting. A small short position is an option, with targets at the MAs and the median of the channel. However, the main target for the short is the bottom of the channel.

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