Is Bitcoin’s vertical rally in danger? Why $ 30,000 isn’t the only level to see

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Bitcoin (BTC) had a tremendous year in 2020, when the price of BTC rose 311% in 2020. In the shadow of Bitcoin, Ether (ETH) also had a fantastic year as the price of Ether rose by an even greater 475%. For only five days in the new year, ETH is continuing this trend.

Bitcoin vs. Ether performance in January 2021. Source: Digital Assets Data

Bitcoin, which hit new all-time highs above $ 30,000, has sparked a massive rally fire that is now spilling over to altcoins. The question now, however, is whether the bull run will continue vertically, as it has done in recent months, or whether a short-term correction can be expected.

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Such a correction would give most cryptocurrencies an opportunity to track Bitcoin towards their respective all-time highs.

Bitcoin must maintain the 21-week MA

BTC / USD 1 week chart. Source: TradingView

There aren’t many indicators to watch for the continuation of this bull market as few will give you enough bull / bear case arguments.

However, a useful indicator is the 21-week moving average (MA). This MA served as support during the previous bull run, indicating a continuation of a high of $ 20,000.

As long as Bitcoin rests on this MA, another continuation is likely for the BTC / USD pair. Currently, the 21 week MA holds support at the $ 16,000 level.

However, corrections often occur with consolidations that can stretch over the next few weeks. During these weeks the 21 week MA will crawl up. The combination of the future prospect of the 21-week MA with the previous all-time high therefore results in a definitive low for a correction in the $ 20,000 region.

BTC / USD 1 week chart. Source: TradingView

Whether Bitcoin achieved the top result for the time being is up for debate, as BTC is still flashing a lot of bullish signals. This bullish price movement is associated with the constant outflow of exchanges, a bullish signal to the market. These bitcoins are expected to be held for the longer term, which makes this bull cycle very different from the 2017 bull run.

Using the Fibonacci extension tools, the continuation of the current rally brings the next interest levels to the Fibonacci levels 1.618 and 2.618 where the next big corrections could take place. These values ​​are currently at $ 50,000 and $ 76,000.

It comes as no surprise, however, if Bitcoin tapers to $ 76,000 this year due to its recent strength.