Will Bitcoin Finally Break Out Above $10,000?

20 May 2020, 08:25 GMT+0000
Updated by Kyle Baird
20 May 2020, 08:25 GMT+0000
In Brief
  • Bitcoin is possibly trading inside an ascending triangle.
  • A breakout could take the price all the way to $10,900.
  • A bearish possibility is also present, supported by a weakening RSI.
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The Bitcoin price is trading inside an ascending channel, but technical indicators are showing weakness. A breakout is more likely, but both options remain possible.

The Bitcoin price is currently trading inside an ascending triangle and has been doing so since reaching a high on May 14. At the time of writing, it was trading very close to the resistance line, and approaching the end of the triangle, which is projected to occur on May 23 at the latest.

Even though the ascending triangle is considered a bullish pattern, there is a considerable bearish divergence developing in the RSI.

Bitcoin Ascending Triangle
Bitcoin Chart By Tradingview

Bullish Bitcoin Scenario

In the bullish scenario, the price is still correcting from the May 9-14 upward move, doing so inside an A-B-C-D-E wave count.

Therefore, if the price breaks out, the rally is likely to be rapid, reaching a top of around $10,900, which is found by projecting the length of wave (1) to wave (3).

BTC Bullish
Bitcoin Chart By Tradingview

Bearish Scenario

In the bearish scenario, this is still an A-B-C retracement that has been going on since the May 8 high at $10,065. This scenario presents itself more clearly when looking at higher time-frames.

Relative to that May 8 high, the recent highs beginning on May 12 are slightly lower, so a descending resistance line is drawn that connects them. The price is still in the process of generating the C wave, which is likely to be the sharpest of the three and could end near $7,800.

BTC Bearish
Bitcoin Chart By Tradingview

To conclude, the Bitcoin price is trading either inside a bullish ascending triangle or has created a bearish triple-top pattern. Since both scenarios seem likely, the prudent play would be to wait for a clear breakout or breakdown before attempting to initiate a position.

For those interested in BeInCrypto’s previous Bitcoin analysis, click here.

Disclaimer

BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.