27 Jul 2022 14:48
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Over the past few weeks, Bitcoin has been steadily increasing in price, breaking through many resistance areas thanks to increased selling pressure. However, analysts at primexbt trading are starting to worry about the possibility of a price reversal as BTC approaches resistance areas that could be overwhelming for bulls.
Bitcoin Logarithmic Growth Trend
Due to the network effect, Bitcoin has long grown on a logarithmic basis – that is, throughout recent years, the price has been steadily making new higher highs.
The chart below illustrates this theory; It shows that, nearly every Bitcoin price cycle in the macro markets is predicted by the Loga growth curve. Loga curves have been providing accurate predictions since 2011.
The accuracy of the logarithmic line has helped us predict the 2018 bear market bottom at $3150 and the $20,000 high in 2017 when both are on this curve. This simple curve has become the best indicator of the volatile crypto market.
However, on the right side of this chart, it can be seen that the price broke down from the Loga trendline during the March market consolidation, when Bitcoin price dropped as much as 50% in just 24 hours.
This event took the bulls by surprise, suggesting that perhaps this was the end of a million percent rally from under $0.01 to thousands of dollars. The bear market is starting to take over, and Bitcoin has yet to repeat its logarithmic rally.
However, with the recent rally of the Bitcoin market, the price is once again close to the logarithmic curve. But it is still too early for prices to rise again.
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Resistance zones ahead
According to Tyler D. Coates - a crypto derivatives trader and technical analyst - the bottom of the logarithmic line, which has seen Bitcoin's price movements over the past nine years, is quickly becoming resistance. Follow primexbt news channel blog to know more about trading
The logarithmic curve currently sits at $8100-8300, while Bitcoin is trading at $7700 at press time. Looking at the importance of this line, there is a high chance that this will become an important resistance area with an upward direction until the bulls catch up.
In addition, the $8100 level is important for Bitcoin for many other reasons.
As reported, an anonymous trader has spotted a series of resistance levels from the $7900 to $8100 price range.
These resistance levels include: the 200-day exponential and simple moving averages, the 21-week exponential moving averages, the order book resistance, also recognized by Rager, the retracement levels. 61.8% Fibonacci retracement, descending triangle top, volume-weighted average price, or VWAP, and several other resistance zones.