Putting Pressure on the Long-term Trend

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Bit­coin came off quite a bit in Q4, and could con­tin­ue to pres­sure its uptrend in the ear­ly part of Q1. This is start­ing to shape up as anoth­er long-term trend test, of which most often BTC has passed. Will this time be the same? 

Giv­ing the trend and sup­port from 2020 the ben­e­fit of the doubt, a test of the 40k area could bring a bot­tom that helps send Bit­coin back to the upside. Ide­al­ly, we see some type of capit­u­la­tion price action occur as the test unfolds, demon­strat­ing a wash-out type low that can help clear the way for the upside. 

How­ev­er, should we see sup­port get bro­ken in con­vinc­ing fash­ion the retrace­ment would become rather deep for it to indi­cate a healthy cor­rec­tive move. On a clear break of 40k the next area of sup­port doesn’t arrive until under 29k. 

From a tac­ti­cal stand­point, it appears longs or would-be longs may want to lean on 40k should we see it come into play soon, but if it breaks then step­ping aside for low­er lev­els may prove the most pru­dent move. 

Bitcoin (BTC/USD) Weekly Chart

BTCUSD Weekly Chart

BTC/USD Charts by TradingView 

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