Bitcoin broke beyond the key $94,500 horizontal resistance on Tuesday and confirmed the breakout later the same day. An intermediate target of $100,000 could be next, before an eventual rally to the last key resistance level at $108,000. Can Bitcoin go all the way, or is this still just a relief rally?
Breakout of key resistance
Source: TradingView
The breakout of the mini bull flag did eventually take place after some fits and starts, but break out it did, all the way up to the key $94,500 horizontal resistance, which also happens to be the top of an ascending triangle pattern (in green). The measured move for the bull flag is to $97,500.
Of much more importance is the breakout of the ascending triangle. This had its top trendline exactly on what was major resistance at $94,500. A breakout of this resistance is huge, given that the next, and the last major resistance is at $108,000.
Before any price targets are focussed on, the main task for the bulls right now is to avoid allowing the $BTC price to come back below what should now be firm support at $94,500. The breakout was confirmed on Tuesday, so if there is another small leg down it may just be a retest of this support.
Just one small matter of concern is that the RSI indicator did not make a higher high, at least not yet. This means that unless the indicator line does rise higher, there will be bearish divergence in this short-term time frame.
A measured move to $108,000?
Source: TradingView
The daily chart illustrates the full extent of the ascending triangle and its measured move to the exact key resistance level of $108,400. If the $BTC price does indeed get there, it will cancel out the potential bear flag. This would possibly happen around $102,000.
At the bottom of the chart, the RSI indicator line has pierced through the downtrend line and looks to be testing the break, mirroring what is happening in the actual price action above.
Relief rally or full-on bull surge?
Source: TradingView
The weekly time frame for the $BTC price reveals what is still a very nascent breakout from the major resistance level and the ascending triangle. The potential bear flag has been drawn in mauve – still a dangerous possibility until the price is well clear of the $101,000 horizontal resistance level.
At the bottom of the chart, the MACD is showing that the blue indicator line has now turned and is starting to head back to the upside. The signal line (red) looks to be about to follow it. A crossover of the two could take place next week, while the first green bar in the histogram could also be painted.
The Fear and Greed indicator is finally back in the neutral zone. Nevertheless, there are still plenty of analysts across social media who believe that this is nothing more than the first big relief rally in a Bitcoin bear market. This could be the case, but the moment the bear flag is nullified, we could be amidst a full-on bull rally that not only takes the $BTC price to a new all-time high, but potentially much further. These next few weeks could be very exciting.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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