Bitcoin Price Struggles to Break Above $38K Resistance Level

Bitcoin Price Struggles to Break Above $38K Resistance Level

Bitcoin, the world’s largest and most popular cryptocurrency, has been facing a strong resistance level at around $38,000 for the past few days. The price of bitcoin has failed to break above this level despite several attempts, and has been trading in a narrow range between $36,000 and $38,000.

According to the technical analysis by NewsBTC, the bitcoin price is showing some bearish signs below the $38,000 resistance level. The price is also below the 100 hourly simple moving average, which is currently at $37,800.The hourly chart of the BTC/USD pair shows that there is a major bearish trend line forming with resistance near $38,000. The trend line coincides with the 76.4% Fib retracement level of the downward move from the $38,915 high to the $36,200 low.

If the price fails to clear the $38,000 resistance level and the trend line, there is a risk of a fresh decline. An initial support on the downside is near the $37,000 level. The next major support is near the $36,500 level, where the bulls are likely to take a stand.

Bitcoin Price Struggles to Break Above $38K Resistance Level
Bitcoin Price Struggles to Break Above $38K Resistance Level

On the upside, a clear break above the $38,000 resistance level could open the doors for a steady increase. The next key resistance is near the $38,500 level, followed by the $39,000 level.

Bitcoin Price Outlook: Fundamental Factors

The bitcoin price is also influenced by some fundamental factors, such as the supply and demand dynamics, the regulatory environment, the institutional adoption, and the innovation in the crypto space.

One of the positive factors for bitcoin is the increasing demand from institutional investors, who are looking for alternative assets to hedge against inflation and currency devaluation. According to a recent report by CoinShares, the institutional inflows into bitcoin products reached $225 million in the week ending November 19, 2023, the highest level since May 2023.

Another positive factor for bitcoin is the innovation in the crypto space, such as the development of the Lightning Network, which is a second-layer solution that enables fast and cheap transactions on the bitcoin network. According to the data from 1ML3, the Lightning Network has reached over 3,000 nodes, 18,000 channels, and 3,000 BTC in capacity, indicating a growing adoption and usage of the technology.

However, there are also some negative factors that could weigh on the bitcoin price, such as the regulatory uncertainty, the environmental concerns, the security risks, and the competition from other cryptocurrencies.

One of the negative factors for bitcoin is the regulatory uncertainty, especially in some of the major markets, such as the U.S., China, and India. The regulators in these countries have been taking a cautious or hostile approach towards bitcoin and other cryptocurrencies, imposing bans, restrictions, or stringent rules on the crypto industry.

Another negative factor for bitcoin is the environmental concern, which stems from the high energy consumption and carbon footprint of the bitcoin mining process. According to the Cambridge Bitcoin Electricity Consumption Index, the annualized electricity consumption of the bitcoin network is estimated at 143 TWh, which is comparable to the electricity consumption of countries like Argentina or Sweden.

Bitcoin Price Prediction: What to Expect?

The bitcoin price is currently facing a strong resistance at $38,000, which could prevent it from resuming its uptrend. However, if the price manages to break above this level, it could trigger a bullish momentum that could push it towards $40,000 or higher.

On the other hand, if the price fails to clear the $38,000 resistance and drops below the $36,500 support, it could enter a bearish zone that could drag it towards $35,000 or lower.

Therefore, the bitcoin price is likely to remain volatile in the near term, depending on the outcome of the $38,000 resistance level. The traders and investors should be cautious and watch the price action closely for any signs of a breakout or a breakdown.

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