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

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

Bitcoin (BTC) remains to be exhibiting energy with a number of makes an attempt to interrupt by $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% larger 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 yet one more big-name institutional investor leaping on the “digital gold” bandwagon.

Nonetheless, is an extra continuation upwards warranted contemplating such euphoria? The Worry & Greed Index is at file highs, making a correction nearly inevitable within the quick time period.

Bitcoin attempting for sixth inexperienced weekly candle in a row

BTC/USDT 1-week chart. Supply: TradingView

The weekly chart for Bitcoin exhibits 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 at present being printed, which is actually a bullish signal.

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

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

Potential bearish divergence on the every day chart

BTC/USDT 1-day chart. Supply: TradingView

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

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

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

If an extra correction happens, the degrees to look at on the every day timeframe are $14,100, $13,100, and the zone round $11,600-12,000. The latter can be a possible assist space on the weekly chart.

Worry & Greed Index nonetheless at file highs

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

Crypto worry & greed index. Supply: Various.me

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

When peak ranges of 80+ are reached, a correction turns into extra doubtless than additional continuation upward. This euphoria is often short-lived because the market usually 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 generally, this doesn’t imply {that a} correction cannot happen. In truth, such bull cycle corrections are sometimes thought of 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 grew to become springboards for the following leg up.