Bitcoin Price Key Highlights
- After consolidating inside a descending triangle pattern for quite some time, bitcoin price finally picked a direction and broke to the upside.
- As predicted in the previous article, a breakout had been looming this week since price has been moving closer to the peak of the triangle.
Bitcoin price could be in more gains from here, with technical indicators hinting that the upside breakout could be sustained.
How High Can It Go?
Bitcoin has just moved past the moving averages, which seemed to be the line in the sand for any gains. This suggests that price is turning a corner and could be taking in more bullish momentum from here.
The 100 SMA is still below the 200 SMA, though, indicating that the path of least resistance is to the downside. However, an upward crossover could confirm that an uptrend is underway so keep close tabs for one. Further buying pressure could take bitcoin price to the top of the triangle at $340.
The average directional index is starting to pick up, edging close to the 40.0 level as of this writing. This suggests a potential return to trending market conditions after bitcoin price has been stuck in a tight range for weeks.
A bit of a pullback might be in the cards since stochastic is already turning down from the overbought zone. This could bring some sellers back in the game, allowing bitcoin price to retreat to the broken triangle support around $320. Similarly, RSI is on the move down and suggesting that a correction might need to take place before the uptrend resumes.
The move may have been spurred by profit-taking activity among dollar pairs ahead of the Thanksgiving holidays in the US. Traders had been on long dollar positions in anticipation of a December rate hike for quite some time, but it looks like they’ve already cashed in on these before the long weekend.
Intraday support level – $320
Intraday resistance level – $340
Charts from Bitstamp, courtesy of TradingView