By the time you’re reading this, Bitcoin will have closed its daily candle, leaving only 48 hours or less to defend a key level.
With a monthly, quarterly, and even higher timeframe close coming up in less than two days, the pressure is on for crypto bulls to fully reclaim the area.
The One Line In The Sand Bitcoin Bulls Must Defend
Every now and again, a psychological level forms that is of emotional importance to the market. A great example of this is Bitcoin at $10,000, $20,000 and now, $30,000. However, none of those are the line in the sand we are referring to.
Instead, a key technical level absolutely must be defended at all costs, or the crypto market could see another leg down. The level in question doesn’t involve complex technical signals, moving averages, or otherwise. It involves drawing one horizontal line from 2020 to now.
This level is of particular importance, because it is the 2020 yearly close, and the 2021 yearly open. Yearly opens and closes act as high timeframe support and resistance. Passing through it and reclaiming it as support is crucial to continuation.
Highlighting The Importance Of The BTCUSD Yearly Open & Close
As we’ve discussed in past content, the highest timeframe signals tend to be the most dominant. This means that a support or resistance level on the yearly chart holds significantly more weight than the daily.
Roughly $28,888 is the price Bitcoin opened at in 2021. This area was first tested as support in the summer of 2021. It held the first time, but it didn’t hold the second time when it was tested again in 2022.
More than a year since the area of support was lost has passed, and BTCUSD is above the zone now acting as resistance. Bulls are hoping to flip the 2020 close and 2021 open back to support. If successful, the cryptocurrency market could make a run back toward former all-time highs.
It is all to easy to overdo it with TA
Sometimes, just one horizontal line can tell you a lot
$28,888 is imperative to close above on the 6M, 3M, and monthly, which close within 72 hours
Charts 12M, 6M, 1M, 3M clockwise pic.twitter.com/MJVX7rSW7v
— Tony “The Bull” (@tonythebullBTC) June 28, 2023
Tony is the author of the CoinChartist (VIP) newsletter. Follow @TonyTheBullBTC & @coinchartist_io on Twitter. Or join the TonyTradesBTC Telegram for daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com