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

Tony "The Bull" Severino

5 years ago

3 mins read

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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.

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.

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.

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.

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

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.

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

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.