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

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

This yearly excessive is greater than 300% greater than the yearly low in March at $3,800. That is spectacular momentum, significantly 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 upward warranted, contemplating such euphoria? The Concern & 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 reveals an obvious resistance zone within the $16,000 area. It’s the primary time in almost three years that this stage was reached. Again then, Bitcoin’s value was rejected at round $16,000.

Moreover, the sixth inexperienced weekly candle is at the moment being printed, which is definitely a bullish signal.

Nonetheless, many ranges beneath the present value are untested on the weekly timeframe. A wholesome strategy to construct up a brand new cycle is the 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 stage that merchants needs to be watching as a result of this will likely grow to be a important pivot space. 

Potential bearish divergence on the every day chart

BTC/USDT 1-day chart. Supply: TradingView

The every 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, nevertheless, organising a possible bearish divergence and a prime building at this stage.

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

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

Concern & Greed Index nonetheless at file highs

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

Crypto Concern & Greed Index. Supply:

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

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

Whereas establishments leaping into Bitcoin or big-name traders stating that they personal BTC are very bullish indicators for the market basically, this doesn’t imply {that a} correction cannot happen. In reality, 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 turned springboards for the following leg up.