Bitcoin Finally Breaks Out, Aiming for Range High

On June 21, the Bitcoin (BTC) price broke out from a descending resistance line that had been in place since July 16. This opens the way for an increase that could carry the price upwards of $9,600. The Bitcoin price had been following a descending resistance line since June 16. The price decreased at the rate predicted by the line, which was also strengthened by the presence of the 200-hour moving average (MA), making numerous unsuccessful attempts at breaking out.

Short-Term Bitcoin Breakout

On June 20, the price bounced at the 0.5 Fib level of the entire previous upward move, creating a long lower-wick that reached the 0.618 Fib level before breaking out. At the time of press, BTC was in the process of flipping the 200-hour MA as support and continuing its upward movement. Besides a minor resistance level at $9,450, the road to $9,600 and the top of the descending resistance line seems clear.

Long-Term Movement

In the longer-term, BTC has been trading inside a descending wedge since June 1, currently being directly under the resistance line. In addition, it seems that the price has completed what resembles an inverse head-and-shoulders pattern, which is considered bullish. Therefore, there is a bullish reversal pattern inside a bullish reversal pattern. If the price breaks out, the two closest resistance levels would be found at $9,650 and $9,820.

However, the weekly chart does not paint a bullish picture. The price has been decreasing since it was rejected by the long-term descending resistance line and the $10,400 resistance area on June 1. Last week, BTC created a Doji candle, which when coming after a decrease usually indicates that the trend is becoming neutral. The price movement cannot be considered bullish until BTC breaks out from both the long-term resistance line and $10,400 resistance area, and validates them as support.

To conclude, the Bitcoin price has broken out from a short-term resistance line and is in the process of breaking out from a bullish pattern. However, the long-term trend cannot be considered bullish until BTC breaks out from the long-term descending resistance line and $10,400 resistance area. For our previous analysis, click here.