- Summary:
- Bitcoin (BTCUSD) experienced a price surge yesteday night which took it above $8500, opening the door for a possible push to the 9420 mark.
If what? If Bitcoin (BTCUSD) is able to sustain the break of the 8289.98 key resistance level that has served at various times as support and resistance over the course of 2 years. But how did Bitcoin prices get here and what is the next move for BTCUSD?
In numerous posts on this blog over the last two months, I spotted the descending triangle on the weekly and daily charts, and predicted the downside break that would take the price to 8289 initially. The 7017 price level was another downside target that could have been achieved if the downside momentum was strong enough.
Yesterday night, a strong bullish push sent the BTCUSD pair above 8,500. This move has taken BTCUSD above the 8289 support, which reversed roles on the initial bearish move and became a resistance. Yesterday’s price surge has once more broken the 8289 price level and turned it into a resistance. However, we need a second candle close for the day, and probably even a close above this level on the weekly chart to confirm this breakout.
I will prefer to use the close of the weekly candle as I believe it provides a better confirmation on which trade decisions can be built on.
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BTCUSD Outlook for Next Week
I would watch for the breakout move above the 8289 price level from the weekly candle. This would open the door for price to aim for 9,420, which is the 38.2% Fibonacci level of the swing high of November 2017 to the swing low of December 2018).
On the daily chart, notice that recent price action has formed a potential double bottom, with a neckline formed by the broken resistance at 8289. A confirmed close above the neckline would confirm the double bottom. The measured move from the confirmed double top pattern would terminate at 9420. This is the resistance level formed by the lower border of the broken descending triangle.
On the flip side, failure to complete the confirmatory filters and subsequent retreat of price below the 8289 price level halts the upside move briefly. This would allow for future attempts at price break above the neckline to confirm the pattern. A drop below 7700 opens the door to the 23.6% Fibonacci price level of 7017, which invalidates the double bottom on the daily chart.