Bitcoin (BTC) faces sharp volatility as the new week begins with Bitcoin price action focused on $42,000 – can it continue?
The largest cryptocurrency, which posted fresh weekend gains of more than 10%, is still keeping traders guessing about its next move.
While the trip to $40,000 was well anticipated, the question now is whether or not the recent move represents the beginning of a new trend, or conversely, a new bull trap.
Valuations currently vary widely, with bullish and bearish views fighting for validity.
Cointelegraph takes a look at the most important support and resistance levels in place now that Bitcoin’s recent price performance has reshaped the market landscape.
BTC/USD is currently trading at around $41,600, according to data from Cointelegraph Markets Pro and TradingViewAfter hitting a 19-month high of $42,160 earlier in the day.
Bitcoin whales reached “sell” at $42,000
A quick look at order book liquidity provides an immediate glimpse of where buyer support and seller interest lie.
loading According to data provided to X (formerly Twitter) on December 4, the trading resource’s trading material indicators showed the strongest bid concentration at $41,500 and $40,700 at the time of writing.
There is a bit of significant selling pressure waiting just above the spot price, with heavy volume traders already selling on the rally. Physical indicators suggest that this is no coincidence.
“As I’ve been saying all week, I thought Bitcoin would continue to rise as long as whales could continue to attract bidding liquidity into the range, or entice enough to distribute into it,” he explained in the accompanying commentary.
“They managed to attract over $120 million into the active trading range, so we were not surprised when we woke up to Bitcoin hitting $42,000, before the sell-off began.”
The analysis added that selling cooled once the buying walls disappeared, with $86 million sold in just 30 minutes.
“I’m not sure the party’s over yet,” she noted, adding that a new $30 million block of bidding liquidity had just emerged to potentially continue the game.
Liquidity data from statistics resources Queen GlassMeanwhile, $42,420 showed as a nearby area of interest for derivatives on the world’s largest exchange, Binance, after the Wall Street open on December 4.
Long-term BTC price levels remain as valid as ever
Zooming out, there’s no denying the psychological appeal of historical Bitcoin price levels.
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For Scott Melker, a trader, analyst, and podcast host who has personally witnessed the emergence of many of these lines in the sand, they are as important as ever.
“$42,000 is historically one of the most important levels for Bitcoin.” Tell X subscribers on December 4th.
The accompanying chart shows the key price points to pay attention to, which have variously acted as magnets since their inception – some more than two years ago.
For example, $42,000 represents the initial rejection price as of early 2021, when the BTC/USD price rose sharply on news that electric car manufacturer Tesla had added Bitcoin to its balance sheet.
“It was the dead top of the Tesla pump in January of 2021, and acted as support and resistance countless times after that,” Melker explained.
Elsewhere on the chart are $31,860, $28,050, and $25,200 – all important support and resistance levels from their initial establishment from 2021 onwards.
On the upside, $48,240, $51,790, and of course, the all-time high of $69,000 represent psychologically relevant resistance levels for market sentiment.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
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