When I last updated my analysis of the cryptocurrency on Aug. 17, I noted that Bitcoin’s decline stopped exactly at the critical $30,000 support zone. Between May and July, prices formed a very bullish “1-2-3” bottom—three dives into support that were accompanied by weakening momentum to the downside—from which it rallied strongly. But the $50,000 resistance zone was too much to overcome on Bitcon’s initial rally off $30,000.
I went on to say that if Bitcoin were unable to push through the $50,000 barrier, then my work would project a pullback to the $42,000-$40,000 area. If it could hold there, I wrote, then Bitcoin would be positioned to challenge the $50,000 resistance zone.
So what happened? Bitcoin pulled back to $40,000—but shortly thereafter, it easily hurdled the $50,000 resistance level on Oct. 6. In just seven trading sessions, prices zoomed 32% higher, on a closing basis. This was the strongest rally off support since February. The daily closing chart (above) illustrates that Bitcoin has hurdled the downtrend from the April peak.
The weekly closing chart (above) shows that Bitcoin is attempting to rally from a rounding consolidation. From here, the $60,000-$65,000 resistance zone beckons. Because prices traded in that area for three months, more time will be required to overcome that strong barrier.
But as long as the crypto could hold support in the $45,000-$50,000 area on any pullbacks, it would be in position to push to new highs in the coming months. And if Bitcoin could hurdle $67,000, then my work would project an advance to $100,000.
Andrew Addison is the author of The Institutional View, a research service that focuses on technical analysis.
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