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Home Cryptocurrency news Bitcoin

Bitcoin Price Rejected At Bear Market Supply Zone, Rally To Resume After Retest of Demand

Tony Spilotro by Tony Spilotro
9 months ago
in Bitcoin, Cryptocurrency news, Technical analysis
Reading Time: 3min read
Bitcoin Price Rejected At Bear Market Supply Zone, Rally To Resume After Retest of Demand
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After the powerful rally unfolding across the crypto market over the last several weeks, Bitcoin price failed to breach cleanly above $10,000 and hold. The move pushed the first-ever cryptocurrency into a supply zone dating back to the start of the bear market where it was rejected.

The failure will likely result in Bitcoin price returning to one of three demand zones, where the asset will confirm buyer interest before proceeding on a new post-halving bull run.

Bitcoin Price Reaches Bear Market Supply Zone, Can It Finally Get Through?

Bitcoin’s halving is just three days away. A rally may have always been expected, but the power presented by bulls over the last several weeks has been shocking.

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And although a pre-halving rally was always anticipated, a sell the news style event was also widely predicted.

That sell the news event may be here, as Bitcoin price has pulled back after its first attempt at breaking $10,000 since the February 2020 top and subsequent Black Thursday selloff.

Related Reading | Bitcoin RSI Reaches Full Power, Highest Overbought Conditions Since June 2019 

Bitcoin price was rejected by a supply zone dating all the way back to the start of the bear market in early 2018. This area first acted as support following the break of cryptocurrency’s widely publicized parabolic advance.

This same supply zone then acted as a top to the early April 2018 rally but was later flipped to support in June 2019. When this support ultimately failed to hold, it became resistance after a powerful bearish retest that was known as the “China pump” in October 2018.

Bitcoin price was able to close only one weekly candle above the supply zone in February 2020. It immediately fell back through it and all the way to $3,800.

This latest attempt, however, has a lot more momentum behind it. And with the halving in three days and hyperinflation in USD coming, the perfect storm for Bitcoin to finally get through may be here.

bitcoin price chart supply demand zones

BTCUSD Demand Levels to Watch: Will a Right Shoulder Form?

Demand levels to But for now, Bitcoin price has been rejected and will fall to one of the many well-defined demand zones below. If buyers are ready to front-run any dips,  the leading cryptocurrency by market cap may only see a drop to $8,200 before it is off to the races.

Another potential target lies at $7,400. The support acted as the launchpad for the China pump and the early 2020 rally.

Another retest of this level would also form the right shoulder on a massive inverse head and shoulders formation. The target of this bullish bottoming structure would push Bitcoin price back to nearly $14,000 where it would retest the June 2019 top.

bitcoin price inverse head and shoulders

A break of that level could send Bitcoin towards its previous all-time high.

Related Reading | Crypto Analyst Highlights Last Ever Bitcoin Dip Using Elliott Wave Theory 

It’s worth pointing out, however, that planning for a right shoulder to form is a poor strategy, as can be seen in this below example that analysts were charting just a couple months earlier.

bitcoin price inverse head and shoulders

However, a breakdown through any of these outlined demand zones would take Bitcoin price back to $5,300 where the Black Thursday carnage finally reversed. Losing that level would put Bitcoin in serious danger of an extended bear market and now lows. This scenario at this point is unlikely as nearly all of Bitcoin’s fundamentals are currently screaming buy, the asset having bullish interest from the likes of Paul Tudor Jones, and with history showing that in the past, each halving takes the asset to a new all-time high.

Featured image from Pixabay, Charts by TradingView

Tags: bitcoinbitcoin pricebtcbtcusdcryptodemand zoneinverse head and shouldersupply zone
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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