Bitcoin (BTC) has slowly climbed above key levels, seeming to indicate that its recent uptrend still has some longevity. This breakout comes after about a week of consolidation in a bull flag pattern, after a trending up from the high $3,000’s on 15 March.
BTC has already made a retest at $4,020, which marks the border between the two zones. The breakout did not come with an extraordinary amount of volume, nor form an impressive new leg up. Failure to hold these levels could result in a breakdown to the previous support/resistance (S/R) near $3,930.
If and when Bitcoin does manage to make more meaningful moves to the upside and preserve the regional trend, it awaits another knot of stiff resistance starting near $4,100 and ending at $4,200. This area would be the final zone of S/R before major moves higher, and probably will not give way easily. What’s more, BTC is approaching a well established downtrend resistance line that was laid in a full year ago, as the 2018 bear market really settled in.
We can more clearly see this downtrend on the daily chart, and also it’s clear that Bitcoin is already coming in contact with this key zone. A continuation of the trend would involve creeping through this zone - whereas a rejection would take BTC down to one of its previous supports. There are many S/R zones in between the current price, and the long term uptrend support at about $3,500 - which Bitcoin is unlikely to break except in the case of a massive capitulation.
In the long term, Bitcoin appears to be solidly in an ascending triangle pattern, which is bullish. Volume is diminishing within this pattern, suggesting consolidation and eventual breakout above the levels previously referenced. This pattern, however, could go on for quite a long time, projecting out into August.
But the possibility of a further breakdown to new yearly lows must always still be considered. Because, while BTC seems to be in an ascending triangle, it could just as easily - seen on the weekly chart - be going through its paces in a bear flag or pennant. The leading crypto is now on its fifth straight week of weekly gains.
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