Why $14Ok appears eerily much like $700 throughout the 2016 election

Whereas most buyers and merchants anticipated large volatility to happen by the election hours, little has occurred. Bitcoin’s worth continues to be comparatively secure and hovering below the essential resistance of $14,000.

On the similar time, Bitcoin’s worth has been moving in tandem with equity markets over the previous 24 hours.

Bitcoin nonetheless can’t break the $14,000 resistance

BTC/USD 1-week chart. Supply: TradingView

The weekly chart is displaying a really wholesome setup as the value actions look pure and natural by way of testing each earlier help and resistance ranges earlier than continuation happens.

Because the chart reveals, this construction has been established with the $10,000 stage, after which the value of Bitcoin rallied in direction of the present worth ranges of $13,800.

In that regard, a correction in direction of the $11,500 area can be comparatively wholesome for the markets, which may see one other help/resistance flip.

BTC/USD 1-week chart. Supply: TradingView

These help/resistance flips are fairly widespread, as additionally they occurred firstly of the earlier cycle in 2016.

Throughout this 12 months, a big variety of range-bound constructions have been seen. This happens till the value of a sure asset enters worth discovery, leading to doable parabolic actions.

2016 election additionally didn’t see a lot BTC volatility

BTC/USD 4-hour chart 2016. Supply: TradingView

An fascinating perspective is that the present run-up of Bitcoin is much like the one in 2016. Within the weeks earlier than the election of 2016, the U.S. Greenback Foreign money Index dropped considerably. This drop precipitated the value of Bitcoin to run from $600 to $740, a rally of greater than 20%.

Nonetheless, not a lot volatility occurred throughout the election itself. The volatility began to kick off when the election outcomes have been confirmed because the vertical crimson line reveals. The worth of Bitcoin moved by 6% in a number of hours whereas the U.S. Greenback confirmed weak spot.

The first query will stay whether or not the election outcomes will set off volatility because the markets maintain their breath.

Subsequently, the large strikes for Bitcoin and markets, normally, might happen after the election outcomes are confirmed much like 4 years in the past.

BTC/USD 4-hour chart. Supply: TradingView

The present pre-election chart is displaying many similarities with the pre-election actions of 2016. An identical drop within the U.S. Greenback Foreign money Index has been pushing the costs of property up.

This meant a rise within the worth per Bitcoin from $10,600 to $13,800, a rally of 30% in a matter of weeks. The numerous distinction at the moment is the stabilization of the U.S. Greenback, whereas Bitcoin continues to be being resilient and persevering with its upward momentum.

Quick-term situation for Bitcoin worth

BTC/USD 4-hour chart. Supply: TradingView

Nonetheless, the 4-hour chart is displaying the potential for a bearish divergence to emerge on the charts. Bitcoin’s worth has ceaselessly been pushing in direction of the $14,000 barrier, simply taking liquidity above the excessive.

These breakouts don’t solely present power as they proceed to get rejected. In that regard, the essential breaker can be the realm between $13,850-13,975 for any continuation of the value. If that breaks, a possible goal of $15,000 is on the desk.

Nonetheless, if it fails to interrupt, a spread help check at $13,000-13,200 appears inevitable. As discussed previously, an extra correction wouldn’t be unhealthy for the markets as which will warrant a really wholesome build-up for the bull cycle itself.

Larger timeframe situation for Bitcoin worth

BTC/USD 5-day chart. Supply: TradingView

The 5-day chart reveals a possible situation within the case of a decrease timeframe breakdown. Thus, if the $13,900 space continues to carry as resistance, a correction to the $11,500-11,800 space wouldn’t come as a shock.