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Bitcoin price gets a boost from the world's richest man, Elon Musk.
Bitcoin (BTC) has been correcting since the peak high at $42,000. However, this correction might have ended as a significant momentum shift occurred in recent days.
The GameStop debacle raised many questions about big parties' trustworthiness and exchanges, after which more and more people started to claim that decentralization is the future.
Among these people is Elon Musk who is worth nearly $183 billion, according to Forbes making him the world's richest person. The Tesla CEO included #Bitcoin in his Twitter profile and also wrote "in retrospect, it was inevitable." A very cryptic message to his 44 million followers, which some may interpret as Musk investing in Bitcoin.
In retrospect, it was inevitable
— Elon Musk (@elonmusk) January 29, 2021
However, this tweet and profile change from Elon Musk prompted a new rally on Jan. 29 with price surging from $32,500 to $38,000 in a matter of minutes. The primary questions now are: does this mean the bull market is continuing and will BTC see new all-time highs?
Bitcoin holds key $30,000 level
XBT/USD 2-hour chart. Source: TradingView
The 2-hour chart shows a clear bullish breakout after holding the significant support zone at $30,000.
The critical breaker for bullish continuation was to find support at $30,000, which happened in recent days. Since then, the next step for bullish continuation would be a breakout above the $34,000 resistance zone.
As the chart shows, and largely thanks to Elon Musk's tweet, the breakout was confirmed, and Bitcoin started to accelerate heavily. The next level to break is $37,600-38,000 as that’s the next area of significant liquidity.
Currently, Bitcoin’s price is trying to crack that level of resistance at $38,000. If this area flips for support, a further bullish continuation toward the all-time highs will likely occur, and $50,000 comes into play.
Total market cap makes a new all-time high
Total cryptocurrency market cap 1-week candle chart. Source: TradingView
The total cryptocurrency market capitalization has reached new all-time highs in the past 24 hours, accelerating to the $1.13 billion level.
However, the total market capitalization and the price of Bitcoin are still far away from the 21-Week MA. That 21-Week MA often sees a support test before continuing upward.
Therefore, the levels to watch for the total market cap are still the same as before. If the market can’t continue going up from here, $730 billion will be the focus as that would grant a perfect support/resistance flip from the previous all-time high.
BTC/USD 1-week chart. Source: TradingView
The weekly chart shows an apparent bullish cycle and a big gap between the 21-Week MA and the current price. These two often come back to each other to get the markets back to the "mean" of the price movement.
Thus, such a correction would bring the price of Bitcoin to the $25,000 region in the coming weeks. In the end, as long as Bitcoin remains above the 21-Week MA, the continuation of this bull market is very likely.
Critical levels to watch for Bitcoin
XBT/USD 3-hour chart. Source: TradingView
Currently, the price of Bitcoin is trying to break through the resistance at $38,000. If that breaks, a continuation toward a new all-time highs seems inevitable, as $40,500 is the only level to watch after $38,000.
In that perspective, even price targets of $45,000 and $50,000 are on the table. However, if Bitcoin’s price can’t break through the $38,000 area, a renewed retest of the $34,000 zone should be expected.
If that doesn’t hold for support, a sharp fall toward the lows may occur along with more range-bound price action. Nevertheless, this would not be unhealthy for the market from a wider perspective.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.