The Bitcoin (BTC) price reached a high of $30,985 on October 23, just slightly below the yearly high of $31,804.
BTC trades below the main horizontal resistance area at $31,300. Will it break out above it?
Bitcoin Nearly Reaches Yearly High
The weekly timeframe technical analysis shows that the Bitcoin price had increased since September (green icon), when it bounced at the long-term $25,000 horizontal support area.
The increase accelerated last week, and BTC created a large bullish engulfing candlestick. This is a type of bullish candlestick when the entire decrease from the previous period is negated in the next one.
Bitcoin reached a high of $30,985 before falling slightly. While the yearly high is at $31,900, the highest weekly close of the year is at $31,600.
Therefore, if the current price were to hold until the end of the week, it would be the highest weekly close this year.
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Since the price has yet to reach this close, some traders are not convinced that the bull run has begun.
There is also mixed news regarding Bitcoin. The price enjoyed its strongest weekly return in 17 weeks, possibly linked to growing buzz about the Bitcoin spot Exchange-Traded Fund (ETF).
However, a key developer in the Lightning Network resigned after discovering a significant security vulnerability in the network.
The weekly RSI is bullish. Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.
Readings above 50 and an upward trend indicate that bulls still have an advantage. Readings below 50 suggest the opposite. The indicator is above 50 and increasing, both signs of a bullish trend.
More importantly, the RSI broke out from its bearish divergence trendline (green line), which initiated the decrease from the yearly high,
Will New BTC Yearly High be Reached?
The daily timeframe analysis shows that the BTC price broke out from the $29,000 horizontal resistance area. The area had been in place since August. This breakout accelerated the rate of increase.
The BTC price is now approaching the $31,300 resistance area. This is the final resistance area before the yearly high.
The daily RSI supports the ongoing increase since it is above 50 and moving upwards. While the indicator is overbought, it has not generated any bearish divergence yet.
If the BTC price breaks out, it can reach the next resistances at $33,700 and $36,000, 10 and 18% above the current price, respectively.
Despite this bullish Bitcoin price prediction, a rejection from the $31,300 resistance area can lead to a 60% drop to the closest support at $29,000.
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