Expert Bitcoin Analysis: Navigating Volatility in December 2020
Bitcoin’s recent price action suggests a critical juncture for traders. The video above provides an initial look at current market dynamics. This detailed Bitcoin analysis delves deeper into short-term, mid-term, and long-term perspectives. We will explore key support and resistance levels, market indicators, and institutional influence. Our goal is to equip expert traders with actionable insights.
1. Short-Term Bitcoin Outlook: Immediate Price Action and Order Books
Current Bitcoin trends indicate a potential breakdown. This is a crucial observation for active traders. Large, “girthy” dumps have been seen. Price appears poised for a downward measure move.
Caution remains paramount in these conditions. Bitcoin is still within a longer-term uptrend. The primary rule of trading is clear: do not short an uptrend. Also, never long a downtrend. Whales often exploit such moves, obliterating unwary traders.
Analyzing order books offers immediate insights. Bookmap data provides a heatmap of potential supports and resistances. These are based on active orders across exchanges like Binance. Currently, a significant 350 Bitcoin support sits at 8,500. This level would absorb substantial selling pressure if reached.
However, upper resistance around 19,000 to 20,000 has diminished. This zone has been “chewed up” over the past week. Less Bitcoin now sits there as a selling wall. This suggests some upward pressure has already cleared some obstacles. Yet, a stalemate persists between buyers and sellers. Large orders dictate the next major move.
A clear breakout requires smashing through these large order blocks. If sellers’ walls at the top are breached, a pullback is expected. Then, further upside becomes more probable. Conversely, if lower supports fail, a swift drop will occur. Imagine if a massive market sell order clears 350 Bitcoin at 8,500. A rapid cascade downwards would follow.
2. Mid-Term Bitcoin Trajectories and CME Gap Analysis
Mid-term predictions for Bitcoin appear bearish. A clear wedge pattern has broken towards the downside. This breakdown is now confirmed. Traders must acknowledge this shift in sentiment.
A significant price target emerges at 18,000. This aligns with the 200 EMA and SMA on the charts. Moreover, a critical CME gap exists just below 18,000. This gap spans from approximately 17,000 to 16,900. Filling this CME gap is a common occurrence in Bitcoin’s history.
This specific CME gap provides a strong bounce potential. Imagine if Bitcoin wicks down to 17,800. This would “fill” the gap. We would then anticipate a strong rebound. This level often acts as magnetic support.
However, caution is still advised. Sustained sideways action around 18,000 is needed. This would help confirm a bottom. Blindly longing at 18,000 can be risky. We must avoid getting trapped if price continues towards 16,000. Traders should remain reactive, not predictive. We must gauge momentum carefully before entering trades.
3. Long-Term Bitcoin Trajectories and Key Price Action Channels
The longer-term outlook on Bitcoin reveals interesting patterns. The “price action channel” offers historical support. Bitcoin has been within an extended uptrend. We are currently seeing a “funneling” of price action.
The 12-hour chart highlights the 55 EMA at 17,800. This point aligns with the CME gap fill. This convergence strengthens the potential support. A bounce from this level back to the 21 EMA is a viable trade. This is not a blind trade. Lower time frame momentum must confirm this move.
Losing the 55 EMA could lead to further drops. The 15,000 level becomes prominent. Here, the 200 EMA sits on higher timeframes. This zone has historically provided strong support. “Megalodonthic pullbacks” to this level often precede new rallies.
The 24-hour chart reinforces these ideas. Losing the 21 EMA at 18,200 is key. This could send Bitcoin to 17,600 or 17,700. This area aligns with the price action channel. It also converges with the 17,800 CME gap fill. Sideways consolidation around 17,000-18,000 would be beneficial. It allows moving averages to catch up. This provides better entry points for longs.
Higher time frames, like the 3-day chart, also show weakening momentum. Multiple red candles have appeared. Previously, “10 plus” green candles signaled strong upward movement. The 18,000 zone is crucial here. Losing it points to 16,100, then 15,000. The price action channel provides strong support at 15,000. Historical bounces from this channel have been significant. Imagine a 28% swing from these levels. This signals massive potential gains.
4. Understanding Market Dynamics: Institutions and the Bull Market Barrier
A deeper look reveals crucial market dynamics at play. The current Bitcoin run might attract “dumb institutions.” These new entrants often lack trading experience. They enter based on hype. News cycles proclaiming “20x” gains are a red flag. Experienced market makers (“whales”) often exploit this.
The “Bull Market Barrier” sits at 13,500 on the 12-hour chart. This indicator shows the steepness of the current trend. It is currently curling over, unlike past cycles. This suggests a period of consolidation. Sideways action is anticipated before a potential crash.
Imagine a scenario where “dumb institutions” go long at peak euphoria. Whales would then orchestrate a massive dump. This “girthy crash” would shake out these new entrants. Support would then be found at the Bull Market Barrier. A wick through, followed by a close above, would signal a strong bottom. This pattern allows for strategic re-accumulation. Smart money waits for this capitulation.
A probable max bottom could be around 12,000. However, some analysts, like “The Moon Kyle,” suggest 8,000 is possible. Such a deep crash would clear out all weak hands. This resets the market for a sustained uptrend. Whales profit by accumulating at these lower levels. They then push the price up significantly. This fundamental game plays out in every market. We can capitalize by understanding their moves.
Short-term, a break above 19,400 targets 20,000. Sustaining above 21,000 points to 23,500. To the downside, losing 18,700 could target 14,800. Losing 17,500 points to a larger move towards 14,800. These are key areas for monitoring Bitcoin price momentum.
