Important points
Bitcoin (BTCUSD) soared above $100,000 for the first time late Wednesday as investors bet the incoming Trump administration and Congress will support policies that will benefit the crypto market.
Wednesday's rally followed news that President-elect Donald Trump has appointed crypto enthusiast Paul Atkins to head the Securities and Exchange Commission (SEC). Atkins replaces crypto critic Gary Gensler, who announced his resignation in January.
Bitcoin recently traded at $103,000, up from about $95,000 before the news of the SEC nomination. Since the election, Bitcoin has soared more than 45% as investors bid up the digital asset in hopes of more crypto-friendly policies.
Below, we take a closer look at the technicalities of Bitcoin's charts and point out important price levels to watch out for.
pennant pattern breakout
Bitcoin rose above $100,000, breaking above a newly formed pennant. This chart pattern indicates that the current rally in traditional cryptocurrencies will continue.
It should also be noted that the 50-day moving average (MA) broke above the 200-day moving average in late October, forming a golden cross, which was a bullish signal that supported the strong upward trend of cryptocurrencies. worth it.
The Relative Strength Index (RSI) confirms bullish price momentum with a value above 70, but the indicator also indicates overbought levels, increasing the likelihood of short-term profit taking.
Next, let's use technical analysis to predict a bullish upside price target as Bitcoin moves into price discovery, and also identify some key support levels to watch on the decline. .
Measuring noteworthy bullish movements
As Bitcoin moves towards price discovery, investors can use measured movements, also known as measurement principles, to predict potential price targets.
This technique works by calculating the impulsive rise preceding the pennant and adding that amount to the upper trendline of the pattern. In this case, we would add $32,430 to $97,500, predicting a bullish target of $129,930.
Key support levels to monitor
A wave of profit-taking could push the Bitcoin price down to around $90,500, with support near the low of the pennant pattern on the chart and a short consolidation period in mid-November. .
Selling below this level could affect the $80,500 area. This area is currently located just below the sloping 50-day moving average and could attract buying interest near the close and open of last week's two bullish candlesticks.
Finally, a more bearish decline could lead to a retest of the major support near $70,000, an area where investors are likely to seek entry points near the highest trendline of the previous trading range. This location could also find support from the 200-day moving average as the closely watched indicator continues to rise.
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As of the date this article was written, the author did not own any of the securities mentioned above.
Correction: This article has been updated with the correct date when Bitcoin surpassed $100,000.
