Why Bitcoin Price Must Crash Before The 2021 Bull Run Begins

3:28 pm, Mon, 21 December 20

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Why Bitcoin Price Must Crash Before The 2021 Bull Run Begin
The Bitcoin price surged more than 500% in 2020 alone, becoming the highest performing asset for the year

While 2020 was a really great year for Bitcoin, it is important to understand that no price of any asset including “Bitcoin” can just keep on going higher forever. We are bound to experience a brief pause and pull back before we can continue going higher, and that expected pullback might just occur sooner than you expect.

In this Bitcoin analysis, we will be pointing out key levels you should watch out for even as we round off the year 2020. We will also be pointing out key patterns that might come into play in the coming days and how best to manage your downside exposure in the case of a price dump.

Bitcoin Price Running Into Major Resistance

Bitcoin Price Running Into Major Resistance
Bitcoin price trading within an expanding channel on the Daily timeframe

Since the lows of $10,000, the Bitcoin price has been trading within an expanding channel. And on numerous occasions, the Bitcoin price has tested the top and bottom of these channels and has respected it.

Right now, Bitcoin is testing the of that channel again, and if it fails to break through, there is a very high probability that we might see the price crash back down to the base of the expanding channel in the coming days.

important levels to keep an eye on
Bitcoin testing critical resistance on the 4-hour timeframe

If this bearish scenario plays out, then the most important support to watch out for is the $20k previous ATH for Bitcoin that was just broken recently. This support also coincides with the base of the ascending channel the Bitcoin price has been respecting all this while.

critical $20k ATH support
Critical $20k support that might come into play in the coming days on the Bitcoin Daily chat

A Bullish Alternative

For a bullish price scenario, the Bitcoin price needs to break through the top of that expanding channel. A break and close above the top of the channel will be a good indicator pointing towards a bullish bias in the Bitcoin price and a likelihood that we might continue to trend higher in the cryptocurrency market.

A Bullish Alternative
Bullish price scenario for Bitcoin on the 4-hour timeframe

But until that bullish breakout occurs, it is important to anticipate a Bitcoin price crash, reduce your exposure, and manage your downside risk.

To gain more information on how to partake in this coming Bitcoin Bull run and trade this cryptocurrency, you can read my How To Trade Bitcoin Guide. You can also check my top list of Best Bitcoin Exchanges To Trade With

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