After many weeks of downward and sideways movement bitcoin is finally breaking out to the upside.
Bitcoin meets resistance
The third green candle in a row has now propelled bitcoin past its downward trend line which has been in force since 13 July. A retest earlier today was successfully made and now bitcoin is attempting to deal with the next resistance at around $27,130.
The upward movement has meant that bitcoin has remained inside its long term ascending channel. If it is able to break this current resistance a move to the top of the channel could be on the cards.
A negative scenario
However, a potential head and shoulders pattern may be lying in wait, with the left shoulder formed in mid-May at $31,000, and the head formed in mid-July at just under $32,000. With the neckline at $24,800, a measured move to the downside could take bitcoin all the way back down to $17,800.
This would be quite a negative route for bitcoin to follow, but the long, upward sloping channel that bitcoin is in would likely have to break eventually, and down looks much more likely than up for this type of chart pattern.
A negation of the bull market?
The question might then be asked: “Does this negate the bitcoin bull run?” The answer would be not at all. Healthy price structure has been built below bitcoin’s current level. Supports at $26,000 and $24,800 are strong, and $19,500 is also an excellent support. Below this is $16,000 and $10,200. A further fall below this and it could be said that the bitcoin bull market may be negated.
Can ethereum flip its own resistance
Ethereum is the king of the altcoins and will be needed to lead the rest of crypto out of its current trough. Currently, it is perhaps starting to do exactly that. The fifth daily green candle in a row will hopefully print by the end of today.
$ETH has reached its own resistance level now at $1,680, and an extremely strong resistance it is. The $ETH price first bumped up against this level all the way back in February of 2021, and flipping this level into support would be a major step.
If $ETH can do this, the next, and the ultimately crucial level of $1,900 awaits. Breaking through this would mean piercing through the top of a bullish ascending triangle it has been in since June 2022, which could unlock the path to much higher prices.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
