BTC price levels to watch as Bitcoin whales ‘lure’ market to $42K
3 min read
Bitcoin (BTC) faces sharp volatility as the new week begins with BTC price action focusing on $42,000 — can it endure?
The largest cryptocurrency, fresh from weekend gains that topped 10%, is still keeping traders guessing over its next move.
While a trip to $40,000 was well anticipated, the question now is whether or not the latest move represents the beginning of a new trend or, conversely, a new bull trap.
Appraisals currently vary widely, with bullish and bearish perspectives battling for vindication.
Cointelegraph takes a look at the most important support and resistance levels now in play after recent BTC price performance reshapes the market landscape.
BTC/USD is currently trading at around $41,600, per data from Cointelegraph Markets Pro and TradingView, having hit 19-month highs of $42,160 earlier on the day.
Bitcoin whales hit “sell” at $42,000
A cursory look at order book liquidity provides an immediate snapshot of where buyer support and seller interest lie.
Uploading the data to X (formerly Twitter) on Dec. 4, trading resource Material Indicators showed the strongest concentration of bids at $41,500 and $40,700 at the time of writing.
Little by way of significant sell pressure lay in wait immediately above spot price, with large-volume traders already selling into the rally. This, Material Indicators suggests, is no coincidence.
“As I’ve been saying all week, I thought Bitcoin would continue to climb as long as whales could keep attracting bid liquidity to the range, or they lured enough to distribute into,” it explained in accompanying commentary.
“They succeeded in attracting over $120M to the active trading range so wasn’t surprised to wake up to BTC taking out $42k, before the selling began.”
The analysis added that selling cooled once buy walls had disappeared, with $86 million nonetheless sold off in just 30 minutes.
“Not sure the party is over just yet. A new $30M block of bid liquidity just showed up to potentially continue the game,” it noted.
Liquidity data from statistics resource CoinGlass, meanwhile, showed $42,420 as a nearby area of interest for derivatives on the largest global exchange, Binance, after the Dec. 4 Wall Street open.
Long-term BTC price levels remain as valid as ever
Zooming out, there is no denying the psychological gravitas of historical BTC price levels.
Related: Breakout or $40K bull trap? 5 things to know in Bitcoin this week
For Scott Melker, the trader, analyst and podcast host who himself has witnessed the emergence of many such lines in the sand, these are as important as ever.
“$42K is historically one of the most important levels for Bitcoin,” he told X subscribers on Dec. 4.
An accompanying chart mapped out the key price points to pay attention to, these variously acting as magnets since their creation — some over two years ago.
For instance, $42,000 represents the initial rejection price from early 2021, when BTC/USD rose sharply on news that electric vehicle manufacturer Tesla had added Bitcoin to its balance sheet.
“It was the dead top of the ‘Tesla’ pump in January of 2021, and acted as both support and resistance countless times after,” Melker explained.
Elsewhere on the chart lie $31,860, $28,050 and $25,200 — all important support and resistance levels since their initial creation from 2021 onward.
To the upside, $48,240, $51,790 and, naturally, the all-time high of $69,000 feature as psychologically pertinent resistance levels for market sentiment.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
