Time for a quick update on Bitcoin.
Following last year’s breakout out of its consolidation range following the big correction which ensued as it tagged the $20k level in 2017 Bitcoin’s 2019 rally ended after rejecting at its larger 1.618 fib. Since then $BTC has done nothing but slowly descend in a very precise pattern. What was a bull flag initially has turned into a long drawn out channel (never breaking the pattern) that recently found support near the .236 fib area and previous resistance:
Note this channel has been very consistent acting as both resistance and support along the way. The previous larger descending channel (wedge) produced an aggressive breakout to the before mentioned 1.618 fib.
$BTC is currently nestled against channel resistance again. Failure to cross in short order risks another reversal to the lower end of the channel. A break out however would likely attract more buyers as the pattern kicks in.
A confirmed breakout can then target the 2018 highs:
Or better yet for bulls: This pattern’s 1.618 fib which currently sits at 18258 which would coincide near the all time highs and hence find resistance there.
The principle challenge for bitcoin here: Following several years of new highs each year 2018 and 2019 werea bust from that perspective. The trend of new highs each year has broken and Bitcoin needs to show serious strength or risk a continues series of lower highs.
It should be noted that this has happened before in bitcoin’s history:
Back then bitcoin experience strong rallies into Q2.
2020 may then to prove to be a decisive year for bitcoin from a price perspective. As of this moment bitcoin could be at the cusp of a breakout out of the channel, but it needs to prove its case.
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Categories: Market Analysis