The crypto market has seen its fair share of volatility recently, but according to popular analyst and trader Michaël van de Poppe, Bitcoin’s price action looks poised for further gains.
In his latest update, van de Poppe points to Bitcoin’s significant rally in October, which saw it break through the pivotal $31K resistance level that had capped previous rallies in 2021. As he notes, “We have been making a very big move to the upside in October where we broke through a pivotal level at $31K.” This level has now flipped to support, holding strong during recent pullbacks.
Several factors seem to be influencing market momentum as we head towards the end of the year. Pending legal issues for major exchange Binance have stoked some fears, but optimism remains high for a spot Bitcoin ETF approval in January along with similar expectations for an Ethereum ETF.
Regarding the market impact of another potential Bitcoin ETF, van de Poppe speculates “The likelihood of a spot Bitcoin ETF approval is going to increase…so that means that if we are going to have a correction, it is probably a liquidity trap.” In other words, an approval could spark a bull run that subsequently traps overleveraged longs. However, van de Poppe considers a drop to $31K unlikely barring major fundamental shifts.
Analyzing Bitcoin’s current chart setup, van de Poppe notes promising technicals. “As long as Bitcoin stays above the latest low, which is currently at $36.7K…everything is fine,” he asserts. The formation of higher lows on the daily timeframe paints a constructive picture, and any negative divergence that seemed to be developing has been invalidated.
If Bitcoin can stay above $36.7K support, van de Poppe sees a bullish outlook emerging. A break past $38K resistance could trigger a rally towards $45K. However, he cautions that “If we’re going to have a case of a breakout upwards to $41K to $42K, we break south and reject here, that is going to be an argument of a valid bearish divergence.” In that scenario, Bitcoin could correct to $32K-34K.
For now, van de Poppe suggests traders focus on lower timeframes while keeping an eye on key levels. He concludes that, “I think you should be looking at lower time frames and at this point, you can see that we’re just trending up.” If Bitcoin keeps trending upwards, $45K looks like the next viable target!
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