Why bitcoin price matters?

Bitcoin - a digital currency created by Satoshi Nakamoto...... I knew that all of you know the history of bitcoin so .. Fast forward!

So why bitcoin price matters?

Simple, it is important so we can make money. Is that it? Yes that's it! Just joking. Lol. It goes deeper beyond that.

Let's explore what is the relation of market direction and certain price points.

So really what it all boils down to is support and resistance, these two are the most fundamental basics when it comes to technical analysis or bitcoin charting. Understanding what this two things are very simple.

According to investopedia:

The concepts of trading level support and resistance are undoubtedly two of the most highly discussed attributes of technical analysis. Part of analyzing chart patterns, these terms are used by traders to refer to price levels on charts that tend to act as barriers, preventing the price of an asset from getting pushed in a certain direction.

Support, or a support level, refers to the price level that an asset does not fall below for period of time. An asset's support level is created by buyers entering the market whenever the asset dips to a lower price. In technical analysis, the simple support level can be charted by drawing a line along the lowest lows for the time period being considered. The support line can be flat or slanted up or down with the overall price trend. Other technical indicators and charting techniques can be used to identify more advanced versions of support.

Resistance, or a resistance level, is the price at which the price of an asset meets pressure on its way up by the emergence of a growing number of sellers who wish to sell at that price.

Everytime the price goes up, let's say a trader on twitter talks about "hey, we can't get above the $13k level". Well, the reason would be becaise everytime it hits the $13k level, sellers come into the market and they push the price down. These are not just random number that people decided upon. There is a specific reason for them.

Resistance levels can be short-lived if new information comes to light that changes the overall market’s attitude toward the asset, or they can be long-lasting. In terms of technical analysis, the simple resistance level can be charted by drawing a line along the highest highs for the time period being considered. Resistance can be contrasted with support.

In traders view:

Support - is where the price will bounce off of. Usually the lowest price that is expected on an asset to go in the short term

Resistance - is where it will hit up against. A number that bitcoin have a hard time getting above

Now let us see what this actually looks like on a bitcoin chart

What you'll see on a lot of charts is you'll see lines drawn in a diagonal pattern, from upper left to down right and they will try to hit the tops of the candle or the top of the wicks which are the very pointy parts at the top.

The charts shows a beautiful resistance that was met with bitcoin in the past because it is actually a horizontal line of resistance.

You can see at the chart that $12k was a number that we can not go above. In the chart shoes that the break out of resistance was done three times and the arrow on the chart is fourth move and finally break out of the resistance.

Now that the candle is above the resistance, the next goal is to turn that into support. We want to take this line and instead of the numbers hitting up against it the candles, we want it to be bouncing off of it.

This is why traders will say things like "hey, once we get above $12500, now we're on a breakout", because now the price is breaking out, we are above the resistance, we don't have anything necessarily holding the price back.

Let's take a look at the weekly chart

We are amidst right now of a real move up. The question now is what's next? We hit the $13200, we bounce back down, then $12900 and now we have a new line of resistance. The next target i think will be $16k and probably between $14k and $15 we will have rejection.

When it comes to understanding the prices the traders are throwing out, they're not random numbers, there is a reason, there is a method to the madness and it will have to do wether it is a horizontal line or a diagonal line.

These are the thing that we must fully understand to figure out what traders are talking about when they're throwing out prices. You should really reverse engineer that and go to a chart, that's how you will learn how to do some simple technical analysis and figure out where did they get that number from and this can point you into the right direction on how to chart, on how to do technical analysis. And lastly make money on crypto.

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