Bitcoin (BTC/USD is breaking above the critical $60,000 resistance and previous top. Will the bulls be able to keep control today and this week? Or will the breakout turn out to be a false breakout.
We will review the key patterns for answering these questions. Plus we also analyse the potential support levels and upside targets.
Price Charts and Technical Analysis
The BTC/USD is showing a bullish breakout above the key $60k resistance, finally after weeks of sideways price action:
- The sideways pattern is probably an ABC (orange) correction in wave 4 (grey).
- Price respected the shallow 38.2% Fibonacci retracement level, which is indicating the bulls are still strongly in control/
- The price action prior to the consolidation was bullish and impulsive, indicating an ongoing wave 3 (purple).
- Price action keeps respecting the 21 ema zone, which indicates a strong uptrend.
- Today’s daily candle is critical for the breakout. A strong bullish candle with a close near the high indicates that the bulls remained in control even as price action is reaching the top. A big wick, however, indicates a potential failed break and retracement.
- Any bearish pullback is still expected to find support at the Fibonacci levels. Only a deeper retracement places the uptrend in danger.
On the 4 hour chart, a 4 hour candle has broken above the $60k mark. There are a couple of scenarios that could take place now:
- An immediate bullish continuation could send the price higher right away (blue arrow). Considering the lengthy consolidation zone, this seems the least likely scenario because the breakout could take longer. A candle close above $61k, however, could indicate more upside.
- Some type of pullback is more likely. But as long as the retracement remains shallow (orange arrows), then a bullish breakout and continuation pattern is expected (green arrow).
- A deeper retracement places the uptrend on hold (yellow circle) or invalidates it (red circle).
- The main targets for upside are located at $62.5, $65, $70, and $75 for the moment.
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter.