Yesterday, Bitcoin tested the $37,500 resistance level that we have frequently discussed, fueled by ETF expectation news. When we look at this level on the daily chart, it’s an important resistance level, and generally, a region where many margin traders have opened short positions. The price shook off these short positions, rising up to the $38,300 level.
Upon daily chart analysis, we can interpret the wick above the $37,500 level as liquidity clearance. Taking a broader view of the chart, since it has tested the resistance area and received a response from that level, it might be expected to test the untested support zone between $31,500 and $32,400.
In the shorter time frame, the first support level we expect the price to hold is at $36,000. If this area is lost, the next support zone between $34,800 and $34,600 is likely to receive a response. This level is significant as it is the “Order Block” level that caused the break of resistance and created a new High, and also because it is an area of “Imbalance”, we can expect the price to react from this area.
Although the price might react from these levels for a short-term scalp in the shorter time frame, considering the overall view that the price might want to test the untested daily support zone, it will be crucial to perform a risk analysis before entering any position.