Buy the dip, sell the rip? BTC price levels to watch as Bitcoin taps $42K
Bitcoin (BTC) faces an uphill struggle to reignite its uptrend after its biggest one-day losses of 2023.
The largest cryptocurrency continues to claw back lost ground after falling to lows of $40,200 after the Dec. 10 weekly close, the latest data from Cointelegraph Markets Pro and TradingView shows.
With BTC price action taking a break from relentless gains — one which many argue was overdue — new key support and resistance levels are coming into play.
The coming days are already set to offer plenty of potential volatility triggers — United States macro data releases begin on Dec. 12, with the Federal Reserve interest rate decision and commentary from Chair Jerome Powell following a day later.
The stage is set for a showdown which may involve more than crypto markets.
Cointelegraph takes a look at some of the popular BTC price lines in the sand now on the radar for traders and analysts as Bitcoin narrowly preserves the $40,000 mark.
Bollinger Bands: BTC bounced “where it was supposed to”
While painful for late longs, the 7.5% BTC price dip which followed the weekly close offered a form of reset for frantic crypto markets.
#Bitcoin has now dropped 7.5% today, which would be the single biggest 1-day drop in 2023.
It has overtaken the drop in March during the banking collapse; -6.2%, bottomed out at $20,000.
Also dropped -7.2% in August when Bitcoin bottomed out at $26,000. pic.twitter.com/WFYiyURO3J
— James Van Straten (@jimmyvs24) December 11, 2023
This was needed, consensus agrees, as unchecked upside typically results in a violent reaction the longer it continues.
“Very overextended, so a pullback was due,” John Bollinger, creator of the Bollinger Bands volatility indicator, argued in a reaction on X (formerly Twitter).
“Stopped right were it was supposed to. That doesn’t happen too often. Now we look to see if support can hold.”
Bollinger referred to Bollinger Bands data, with an accompanying chart showing, among other things, the forcefulness of the latest upside within the context of broader recent BTC price strength.
On daily timeframes, the dip took Bitcoin straight to the middle band within the Bollinger channel, making the correction something of a textbook move and cause for optimism going forward.
The air is getting a bit thin up here, but all we see as of now are signs of strength. We are outside both the daily and weekly BBs with no divergences. The last controlling formation was the 2 bar reversal at the middle BB completed on 21 Nov. $BTCUSDhttps://t.co/B4ZU3vpTvV
— John Bollinger (@bbands) December 5, 2023
The week prior, meanwhile, Bollinger warned of increasingly constrictive conditions which could be warning over a local top in advance.
Large Bitcoin buyers may play “buy the dip, sell the rip”
Looking at the behavior of large-volume traders, some commentators see encouraging signs after the open interest flush at the hands of the dip.
Uploading a print of BTC/USDT order book liquidity on largest global exchange Binance overnight, trading resource Material Indicators revealed a new band of support at $38,500.
While lower than both $40,000 and this week’s bottom, Material Indicators suggested that “institutional sized” bids could now be returning — but that there could be a caveat.
Accompanying analysis concluded that “it’s not yet clear whether they are legitimately starting to accumulate at these levels or just buying dips and selling rips.”
“After all, we have a Fed Rate Hike decision coming this week and #JPow’s speeches are typically good for some volatility,” it added.
Continuing on Dec. 12, popular trader Skew likewise considered the odds of manipulation among larger players.
“Seeing a bit of change in the mindset of large spot players whom were actively chasing price before,” he told X followers about the Binance order book.
“Current mindset seems to be buy the dip & sell the rip till bid depth & liquidity improves for large capital to return.”
Skew put the key BTC price areas to watch at $38,000-$40,000 and $44,000-$45,000, respectively.
Analyst: Bitcoin will greet yearly close in “new range”
In terms of major support, popular trader Ali additionally noted the range around $38,000 as a formidable barrier against major downside.
Related: Price analysis 12/11: SPX, DXY, BTC, ETH, BNB, XRP, SOL, ADA, DOGE, AVAX
“In case of a deeper correction, Bitcoin finds solid support between $37,150 and $38,360. This zone is backed by 1.52 million addresses holding 534,000 $BTC,” he showed alongside data.
“Also, watch out for two resistance walls that could keep the BTC uptrend at bay: one at $43,850 and another at $46,400.”
Michaël van de Poppe, founder and CEO of MN Trading, meanwhile flagged a floor zone slightly lower at $36,500.
Bitcoin, he believes, should end 2023 in a “new range.”
Crucial levels to hold for #Bitcoin are, on higher timeframes, $36,500-38,000.
With this correction, we’ll see bounces coming from $39,500-40,000 back to the $42K+ mark.#Bitcoin is likely going to create a new range before the end of the year. pic.twitter.com/bmQIREzEW8
— Michaël van de Poppe (@CryptoMichNL) December 11, 2023
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
