Bitcoin (BTCUSD) Could Retrace Before Continuing Rally

BTCUSD Could Pullback to $39,800 to Continue Rallying

BTCUSD could retrace to $39,800 before it continues its strong upward drive. So far, Bitcoin has continued the trend that it began at the beginning of the year at the $16,500 demand level. The price has since been gliding upward through a parallel channel, with only a setback coming in mid-August at $30,000. The market spent another two months languishing between $25,000 and $28,000.

BTCUSD Key Levels
Supply Levels: $38,000, $42,570, $46,000
Demand Levels: $35,000, $33,700, $28,000

However, by mid-October, strong momentum had been gained from two months of consolidation. This has caused BTCUSD to skyrocket. There was also a major hold-back between $33,700 and $38,000, but the bulls exhibited incredible resilience to bypass the zone. Afterward, the price surged further to violate the $42,000 significant level. However, signs of initial exhaustion have set in, and the price has dropped below $42,000 as of the time of writing.

The ATR (Average True Range) indicator on the daily chart shows a heightened level of market volatility. Through this, the coin has been able to easily navigate through several resistance levels. The MA period 30 (Moving Average) remains below the consolidation point at $33,700 and $38,000, showing the bulls are very much domineering at this point.

Market Expectations

On the 4-hour timeframe, the ATR indicator shows that market volatility is wobbly at the moment as the market tries to navigate another major level. The MA period 30 has risen to underline the candlesticks below the $42,000 threshold, so the buyers remain active in the short timeframe as well. There could, however, be a retracement to $39,800 or to meet the MA period 30, which is expected to take the price beyond $42,000.

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