Bitcoin surged past the 10,400 mark today as the bulls took over the initiative of forcing up prices from the long-term support levels that have held for several months. After appearing to take a plunge below the 10,000 mark, the number 1 cryptocurrency found support at 9,250- 9,400 as clearly defined by the traces I did on the charts some weeks ago.
On this weekly chart, I did a trace of the Fibonacci retracement tool from the November 2017 swing highs to the December 2018 swing lows, which defined the 38.2% and 50% retracement levels that have become relevant to the recent price movements of BTCUSD.
I also traced the down trendline across the highs of the weeks that ended on June 23, July 7 and August 4. Below this area, we have the red line at 10.620 which has acted as both support (weeks ended July 7 and August 4) and resistance areas (weeks ended July 14, 21 and 28 as well as August 8).
Possible Trade Plays for BTCUSD
Technically speaking, BTCUSD is still in a long-term downtrend; it is yet to reach the all-time highs of November 2017. At the current price of 10,418 (as at the time of writing), BTCUSD is close to testing the long-term resistance at 10,620.
If BTCUSD breaks above this price level, it could be poised to make it to the interaction point with the down trendline at just below the 11,000 mark. On the other hand, failure to breach the 10,600 resistance will lead to a further retest of the 9,400 support area.
It must be observed that the entire price pattern is in a descending triangle. Therefore, traders should be aware of a possibility of a breakdown of the 9,400 support level, which will open the door to the 7,200 price area (23.6% Fibo retracement level).