Bitcoin (BTC/USD) Pulls Back, Remains Bullish with Breakout Potential

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Bitcoin, BTC / USD price analysis:

  • Bitcoin has returned to the resistance level of 60,000 and threatens a breakout potential.
  • Bitcoin was tested over 60,000 on March 13thth But buyers couldn’t keep up and BTC / USD pulled out. Since then, there have been multiple tests at or around the resistor and buyers haven’t left a 60,000 behind.
  • The analysis contained in the article is based on Price action and Chart formations. For more information on price movements or chart patterns, see our DailyFX education Section.

The last time I wrote about BitcoinThe cryptocurrency had just seen a retreat due to short-term support levels following a prohibition warning from hedge fund magnate Ray Dalio. As noted at the time, there was a tremendous zone of support lurking around the psychological level of 50,000 beneath the current price action. And in a market like Bitcoin where a lot of retailers are making predictions, the psychological level can have a big impact as Bitcoin trading at $ 49,999 appears to be a lot cheaper than just $ 2 less than $ 50,001.

Learn more about it how psychological levels work Join the market dynamics DailyFX education

Bitcoin bulls kept impressing, however, as this low was worked out before a test below the 50 km mark. Instead – less than a week later – Bitcoin competed at 60,000 against another psychological level that is still resilient. The bulls tested above this level, albeit briefly, in early March. and since then there have been several failed breakout attempts at that price on the chart.

Four-hour price table for Bitcoin (BTC / USD)

Diagram created by James Stanley;; Bitcoin on Tradingview


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Bitcoin Brewing for Bullish Breakout?

You can see from the table above that the “V-shaped” setup developed in late March has evolved, originally driven by the same decline I spoke of two weeks ago when buyers stepped in and prices hit that resistance again of 60,000 pressed.

This also seems very similar to a bullish breakout pattern known as the inverse head and shoulders pattern. The neckline and heads are there, but the shoulders would be a bit soft, at least in my opinion, to consider this a legitimate inverted head and shoulders pattern.

To find out more about what that is inverse head and shoulder pattern, check DailyFX education

The current Bitcoin setup, however, has similar tonalities: a consistent area of ​​horizontal resistance marking an area that resembles a “cutout”. There is a V-shaped movement that could form a “head” of this formation. And while the shoulders are absent, the background shows very similar dynamic that opens the door to bullish breakout potential.

But what makes the current background in Bitcoin so exciting is the same thing that intoxicates the inverted head and shoulders pattern: persistence. With both our current setup in Bitcoin and the inverted head-and-shoulders pattern, bullish persistence is the main concern, even after the price move swung a few weeks ago. Buyers reacted – pushed straight back to resistance, and that same bullish excitement could eventually lead to a sustained break of the 60km level.

In the short term, the price action tests a confluent support point indicated by two Fibonacci levels between 57,032 and 57,354. Below that there is another area with potential support at 53,998-54,615.

Bitcoin (BTC / USD) two-hour price chart

Bitcoin two-hour price chart

Diagram created by James Stanley;; Bitcoin on Tradingview

— Written by James Stanley, Senior strategist for DailyFX.com

Contact and follow James on twitter: @JStanleyFX

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