Cryptocurrency strategist and trader Scott Melker is analyzing how the price of Bitcoin may move over the coming days and weeks.
Melker tells his 78,000 YouTube subscribers that Bitcoin (BTC) will likely face strong resistance just above the $50,000 level. The cryptocurrency analyst argues that the resistance level coincides with a key Fibonacci indicator number.
“As I said for a long time, $50,493 is 23.6% [Fibonacci] retracement. That’s of the entire move up from $3,800 to $65,000. That’s going to likely be strong resistance, we’re seeing that right now.”
Melker says that after rallying for five consecutive weeks, Bitcoin could correct once it encounters resistance.
“Listen, it would not be strange to get a bit of retracement after five weekly candles in a row. We’ve gone from basically under $30,000 up to $50,000 in just five weeks.”
The crypto analyst and trader also says that Bitcoin could potentially fall to around $42,000 if the $48,190 support level fails and especially if the flagship cryptocurrency crumbles below the 200-day moving average (MA) on the daily chart.
“We flipped this key new level of $48,190. You can see that was the resistance, the top of this move before the retracement. That’s flipped to support – we had to test two days as support, so we’ll see if that holds. That’ll be interesting. If that doesn’t, then of course we start talking about the 200 MA, which seemingly the whole community was talking about once again. And then still that potential drop down to the $42,000 area, which still has not happened. That would be a very strong signal to see the $40,000 to $42,000 area tested as support.”
Looking at the four-hour chart, Melker says that Bitcoin has formed an ascending channel, which is characterized by higher highs and higher lows.
“So this is neither a bull or bear flag – it’s just an ascending channel at the top of a move. Most people would expect this to break down and retrace a little bit. But that could literally just be down to the $47,000-$48,000 range.
Or an ascending channel can just turn out being a stairway to heaven. And in bullish moves, you kind of continue to climb up and you see ascending wedges and ascending channels broken to the upside quite regularly.”
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