13 Oct 2020 #Bitcoin
Bitcoin (BTC) price had been acting inside a narrow range for the last few weeks but the momentum and trend shifted as a bullish breakout occurred on the announcement that Square had allocated 1% of its cash reserves to BTC. This bullish breakout even caused the price to rally from $10,600 to $11,500, which is almost $1,000 in a few days.
Despite this strong upside move, traders are still cautious as they are unsure whether the bullish momentum is back or if this is just a temporary blip. The daily chart of Bitcoin is showing a clear upward move toward the upper range resistance. The critical factor to watch is whether the $12,000-$12,400 resistance zone breaks as that would imply another impulse wave is on the horizon.
While most investors were expecting further movement to the downside, the complete opposite happened. The current movements can be compared with the start of the previous bull cycle at the beginning of 2016. During the start of the previous bull cycle, similar movements were seen. It’s before the parabolic moves occur, through which the period can be defined as boring. In 2015 and 2016, a period of six months was defined by range-bound construction before a breakout happened. During these constructions, previous resistances were confirmed as support, after which a dull sideways period continued to occur.
The critical level to break for further bullish momentum is the $12,000 resistance zone. However, as the current construction is similar to the movements in 2016, a breakout could take a while to occur. In such a way, if the breakout above $12,000 happens, a bullish move towards $17,000 is very much on the horizon. The area around $17,000 is the next central pivot, and final hurdle before new all-time highs can occur.
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