Bitcoin breaking through $12K is huge but don’t expect higher prices before 2021

Bitcoin price may now see sideways action for a few months after breaking through crucial multi-year resistance at $12,000.

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The previous week has been tremendous for Bitcoin (BTC) investors as price broke the crucial barrier of $12,000, culminating in a surge from $11,300 to $13,300, a rally of $2,000 within a week.

A new yearly high was printed, while the dollar has been showing weakness as well. Next to that, multiple listed companies came along with statements regarding allocations of Bitcoin rather than the U.S. Dollar.

All these arguments line up for a continuation of the bull market, but which levels should be watched? Let’s take a closer look at the charts. 

The $12,000 barrier was crucial for Bitcoin

BTC/USD 1-week chart. Source: TradingView

As Bitcoin’s weekly chart shows, the $11,600-12,000 area was a crucial area to break for any bullish continuation. This resistance area has been persistent since the start of the bear market at the beginning of 2018. For over thirty months, the price of Bitcoin couldn’t break through this resistance zone, until the previous week.

The beginning of a bull market is often flagged by beautiful support/resistance tests for continuation, which is also seen at the $10,000 level. After this support/resistance test, the upward run continued.

BTC/USD 3-day chart. Source: TradingView

The $10,000 level got a retest and held, which marked a new support zone. Since then, Bitcoin’s price has continued to run upward, which led to the breakout above the $12,000 barrier.

The $11,600 resistance must flip to support

BTC/USD 3-day chart. Source: TradingView

As the $11,600-12,000 broke upward, some interesting levels can now be determined for traders to watch in the upcoming weeks. Often, buying after such a big rally isn’t the best strategy since a retest of lower levels is likely. 

As mentioned, the confirmation of a support/resistance flip at the $10,000 level warranted upward momentum. A similar case is likely here. The crucial barrier of $11,600-12,000 is likely to see a support level test before the market can continue rallying.