Bitcoin price looks to resume bull cycle after rising above $34K

Bitcoin (BTC) has been consolidating since the recent all-time high at $42,000 and has risen back above $34,000 at time of writing. The current correction is currently at 30% already, as Bitcoin’s price has bounced from the $30,000 region several times.

However, it remains to be seen whether Bitcoin’s price will start accelerating once again or whether BTC price needs more consolidation to build up strength.

Several periods of accumulation were seen in 2020, where Bitcoin’s price ranged for a period of a few months. Such a period is, in fact, needed to build strength for continuation. The primary question is whether such a range-bound construction will now yield the same results. 

Clear downtrend since $42,000

BTC/USDT 3-hour chart. Source: TradingView

The 3-hour chart shows a downtrend since the peak high at $42,000. This structure is formed using the lower highs and lower lows. In this example, the lower highs are marked in the grey boxes and are significant.

Therefore, for any bullish reversal, Bitcoin’s price must break through the critical resistance zone at $34,000-34,500, as that’s the previous support. If that level doesn’t flip for support again, the market will classify that as a support/resistance flip, and more downside becomes likely.

The price of Bitcoin has been testing the support area at $30,000 for a significant amount of time. The more often a level gets tested, the weaker it becomes. In addition to this are the weaker bounces from the $30,000 region, which have resulted in lower highs. 

If, therefore, $34,000 doesn’t flip into support, a renewed test of the $30,000 zone should indicate further weakness, putting $24,000-26,000 on the tables.