Why $ 14,000 in the 2016 election looks weirdly similar to $ 700

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While most investors and traders expected massive volatility during election hours, little has happened. Bitcoin’s price is still relatively stable, hovering below the critical resistance of $ 14,000.

At the same time, the price of Bitcoin has moved in parallel with the stock markets for the past 24 hours.

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Bitcoin still can’t break the $ 14,000 resistance

BTC / USD 1 week chart. Source: TradingView

The weekly chart shows a very healthy setup as the price action looks natural and organic by testing all previous support and resistance levels before continuing.

As the graph shows, this structure was set at the USD 10,000 level, after which the price of Bitcoin recovered to the current price level of USD 13,800.

In this regard, a correction towards the region of $ 11,500 would be relatively healthy for the markets, which could result in further spike in support / resistance.

BTC / USD 1 week chart. Source: TradingView

These support / resistance flips are quite common as they also appeared at the start of the previous cycle in 2016.

A significant number of sectoral designs have been observed this year. This continues until the price of a particular asset enters pricing, which leads to possible parabolic movements.

In the 2016 elections, BTC volatility was also low

BTC / USD 4-hour chart 2016. Source: TradingView

An interesting perspective is that Bitcoin’s current ramp-up is similar to that of 2016. In the weeks leading up to the 2016 election, the US dollar currency index fell significantly. That drop caused the price of Bitcoin to rise from $ 600 to $ 740, a rally of more than 20%.

However, there was not much volatility during the election itself. The volatility started when the election results were confirmed, as shown by the vertical red line. The price of Bitcoin moved 6% in a matter of hours while the US dollar showed weakness.

The main question will remain whether election results will spark volatility if markets hold their breath.

Hence, the big strides for Bitcoin and the markets in general may come after election results are confirmed similar to four years ago.

BTC / USD 4-hour chart. Source: TradingView

The current area code chart shows many similarities to the 2016 area code moves. A similar decline in the US dollar currency index has driven asset prices higher.

This meant an increase in the price per bitcoin from $ 10,600 to $ 13,800, a rally of 30% in a matter of weeks. The main difference is currently in the stabilization of the US dollar, while Bitcoin remains stable and continues its upward momentum.

Short term scenario for the Bitcoin price

BTC / USD 4 hour chart. Source: TradingView

However, the 4 hour chart shows the possibility of bearish divergence on the charts. Bitcoin’s price has moved towards the $ 14,000 mark many times, only bringing liquidity above the high.

These breakouts aren’t quite showing strength as they continue to be rejected. In this regard, the key breaker would be the $ 13,850-13,975 range for price continuation. If that doesn’t work, there is a potential target of $ 15,000 on the table.

However, if it doesn’t work, a range support test at $ 13,000-13,200 seems inevitable. As mentioned earlier, another correction would not be unhealthy for the markets as it could warrant a very healthy build up for the bull cycle itself.

Higher timeframe scenario for Bitcoin price

BTC / USD 5-day chart. Source: TradingView

The 5 day chart shows a likely scenario in the event of a lower timeframe. So, if the $ 13,900 area continues to be resistance, a correction to the $ 11,500-11,800 area would not be a surprise.