Can Bitcoin price conquer $16,000 as 'extreme greed' grips market?

Can Bitcoin worth conquer $16,000 as ‘excessive greed’ grips market?

Bitcoin (BTC) continues to be displaying power with a number of makes an attempt to interrupt via $16,000 on Nov. 12. A brand new yearly excessive was established all through the day with BTC worth peaking at $16,150. 

This yearly excessive is greater than 300% increased than the yearly low in March at $3,800. That is spectacular momentum, notably because the life is being drained from altcoins.

Even Stan Druckenmiller acknowledged this week that he purchased Bitcoin, anticipating BTC to proceed to outperform gold. That is one more big-name institutional investor leaping on the “digital gold” bandwagon.

Nonetheless, is an additional continuation upwards warranted contemplating such euphoria? The Worry & Greed Index is at document highs, making a correction virtually inevitable within the brief time period.

Bitcoin making an attempt for sixth inexperienced weekly candle in a row

BTC/USDT 1-week chart. Supply: TradingView

The weekly chart for Bitcoin reveals an obvious resistance zone within the $16,000 area. It’s the primary time in almost three years that this degree was reached. Again then, Bitcoin’s worth was rejected at round $16,000.

Moreover, the sixth inexperienced weekly candle is presently being printed, which is actually a bullish signal.

Nonetheless, many ranges beneath the present worth are untested on the weekly timeframe. A wholesome strategy to construct up a brand new cycle is backtesting of earlier resistance ranges as new areas of help.

This retest didn’t happen on the $12,000 space, for instance. Therefore, it is a degree that merchants needs to be watching since this will grow to be a crucial pivot space. 

Potential bearish divergence on the each day chart

BTC/USDT 1-day chart. Supply: TradingView

The each day timeframe reveals a possible breakout above $15,600. Such a breakout is probably going going to happen with a big quantity, which might point out main power.

The present breakout lacks quantity, nonetheless, establishing a possible bearish divergence and a prime development at this degree.

In that regard, if Bitcoin’s worth breaks south and loses the $15,600 degree, an additional correction appears inevitable.

If an additional correction happens, the degrees to observe on the each day timeframe are $14,100, $13,100, and the zone round $11,600-12,000. The latter can be a possible help space on the weekly chart.

Worry & Greed Index nonetheless at document highs

The Worry & Greed Index continues to be at extraordinarily excessive ranges, as the present degree is 87 out of 100, the very best since June 2019, which marked the highest of the earlier bull cycle.

Crypto worry & greed index. Supply:

The Worry & Greed Index is a useful gizmo for gauging market sentiment.

When peak ranges of 80+ are reached, a correction turns into extra probably than additional continuation upward. This euphoria is incessantly short-lived because the market typically strikes in the other way that almost all of merchants anticipate.

Whereas establishments leaping into Bitcoin or big-name buyers stating that they personal BTC is a really bullish sign for the market basically, this doesn’t imply {that a} correction cannot happen. In actual fact, such bull cycle corrections are sometimes thought-about wholesome for the Bitcoin market.

Within the earlier bull market cycle in 2017, BTC/USD noticed a number of drops of 30% that resulted in retests of earlier resistance ranges, which then turned springboards for the subsequent leg up.