Bitcoin is back above $9,000. So what’s new about it and what can we expect for the coming days?
Chart 1 – BTCUSD Panoramic View of S&R on a Weekly Chart
(click on the arrowed square to magnify it)
The chart above shows the panoramic view of BTCUSD on a weekly chart, with its major supports and resistances involved in the past and present price action. We can see that these lines connect with past key levels. Therefore, we have to respect them very much, especially the coming resistances: 9,950 and 11,800.
There we can see, also, that the 8,000 level is a strong support for the price, although for some days it was a very tough resistance level. Anyway, last week the coin had enough buying strength to cross this psychological key level and moved up to pass the $9,000 level again, this time avoiding the selloff that happened two weeks ago.
The Cup and Handle
Chart 2 – BTC Daily Chart showing the Cup & Handle Formation
In the daily chart, we can see that the price action in the Bitcoin since November 2018 has been drawing a clear Cup & Handle pattern, the handle being the trading range it has been moving from mid-May till now. This is a well known bullish pattern in the stock world, if the price manages to move above the “handle” range.
During the last weekend, the price has scaped that range and currently moving above it in search for further highs. This strength shows that the bears that had pushed the price down seem to be defeated.
Short-term, the price, as can be seen on the weekly chart, will suffer strong resistance slightly below $10,000, since this is a strong key psychological level. It wouldn’t surprise a bounce from this level back to touch again the $8,800-9,000 area, which now should have been converted to support., if the $10,000 is crossed, the next resistance level is $11,800.
The majority of opinions about the future price action at these levels agree that bitcoin will incur in increasing demand from buyers. Therefore the price may accelerate and become even more volatile.
This calls for trades on the buy side on pullbacks as the safest trading strategy.