Bitcoin price has broken up out of its trading range and has potentially also broken out of a massive, multi-year triangle.
If the breakout can hold and confirm, the first logical target according to an important bull market factor would be $14,000.
Bulls Push Bitcoin Price Out of Sideways Range, Causing the Cryptocurrency to Skyrocket
Since early May, Bitcoin price has traded sideways in an increasingly tighter range. Starting early last week, the cryptocurrency began the start of a rally.
The surge caused an initial lift in the Bollinger Bands, which had previously reached a tightness not seen since the November 2018 drop to $3,200. It was then on Bitcoin bulls to follow through, or risk a “head fake” according to the technical indicator’s creator.
But bulls have indeed followed through, pushing Bitcoin today through resistance at $10,500 and setting another higher high on high timeframe price action.
BTCUSD Daily Triangle Breakout | Source: TradingView
If the cryptocurrency can close today’s daily price candle above the key level and hold it as support, it may be the start of a new Bitcoin uptrend.
BTCUSD faces a pair of sell signals on daily timeframes, however, stimulus packages expected today could keep the asset pumping.
Related Reading | What Happens Next? Bitcoin Range Falls To Tightest Point In History
If it does continue to rally from here, the first major resistance is likely at $14,000, according to one crypto analyst.
3/ If we do breakout then a first major area of resistance will be the $14k area, based on the Golden Ratio Multiplier.
That would be the 1.6 x multiple which has been previous resistance at this early stage of bull markets.
Live chart: https://t.co/7mM9DRe33Z pic.twitter.com/zCfDEh4LCC
— Philip Swift (@PositiveCrypto) July 27, 2020
BTCUSD Resistance Lies At $14,000 According To The Golden Ratio
The entire cryptocurrency community is talking about Bitcoin’s breakout from its boring trading range. Momentum pent up from spending such a long time consolidating below resistance could send the cryptocurrency surging much further if the breakout holds.
The first stop and major resistance level above here, according to crypto analyst Philip Swift, is $14,000.
XBTUSD Daily Golden Ratio Multiplier | Souce: TradingView
Not only is this the level where the cryptocurrency was rejected from in June 2019, prompting another year of downtrend in the asset class, it is also a target based on the golden ratio. Swift claims that this multiplier has acted as resistance in the past during “early stage” bull markets.
Fibonacci ratios are used to find potential support and resistance in financial assets. Multiples of 1.6x or the golden ratio of 1.618 can have significant reactions when price approaches. Either these areas mark where potential reversals may occur, or they act as key levels that once broken through can have a dramatic effect.
Related Reading | How Will Bitcoin Respond To Its Biggest Listing Yet? The United States
If Bitcoin price can continue to push higher, and breach through $14,000, two strong resistance levels remain. One is $17,000 where the first lower high took place in 2018 before starting the bear market. The second, of course, is the asset’s former all-time high of $20,000.
Could Bitcoin follow gold, which recently smashed through its all-time high and is still climbing ahead of the expected stimulus announcement today from the United States?
by Tony Spilotro on July 28, 2020 at 01:30AM
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