Over the course of the last 10 days, bitcoin has managed to rally nearly 20in value as it burst through two major resistance levels and is now beginning the test of a major macro level:
We can see a clear, descending supply-and-demand channel that governed the market for the last two months. Yesterday, the market broke north of the channel and it has since begun to march toward a major macro level (red dashed line). This level is very significant; A test of this level will make or break the current market structure. If we fail to break through and fail to close a new high, this could be a strong bearish signal that supply is still highly present in the market and needs to be shaken out before any meaningful upward progress is made.
At the moment, we are currently breaking out of a large, symmetrical triangle that has quite a large price target:
The symmetrical triangle (outlined in purple) is a huge consolidation pattern and has the potential to reach the $5,000 range based on the measured move for symmetrical triangle breakouts.
It’s important to note that we are still in a bear market, and it’s possible to see a fakeout of this consolidated breakout. We will have more information once we test the resistance level and, for now, we seem clear for another bit of movement to the upside.
Sitting just above the aforementioned resistance level lies the weekly 200 EMA. The weekly 200 EMA is a notoriously tough level to break as it represents the general macro health of a market. To date, we have tested it a couple times but have not managed to close above it in many months.
There are many levels to overcome with this symmetrical triangle breakout and they shouldn’t be underestimated. For now, things are looking bullish on the low timeframes and we must keep an eye on the higher time frames as we are on the cusp of breaking market structure. Patience is necessary here because these markets are volatile and one could easily be stuck in an unfavorable position.
- A strong rally pushed the price up 20over the last 10 days. So far, we have yet to establish a new high.
- Just above the current price level is a strong band of resistance that the market has failed to break. This resistance includes the weekly 200 EMA — a notoriously strong level to break.
- If we fail to pop a new high, we can expect to see a retest of the low $3,000s.
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