Despite spending the most part of the week in consolidation, bitcoin price seems to have broken a critical resistance level. Last week, movement on BTCUSD was limited between support at $9,054.00 and resistance at $9,582.00. Could this mean that we may soon see bitcoin price rally to the $10,000.00 psychological handle?
On the 4-hour time frame, it can be seen that the cryptocurrency is trading above the falling trendline (from connecting the highs of June 1, June 10, and June 16). When you enroll in our free forex trading course, you will learn that a trendline break is often interpreted as a sign that there is bullish momentum.
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Further affirming this bias is the recent price action on bitcoin price. When you look closely, you will see that BTCUSD has been making higher lows after a series of lower lows. Consequently, a potential inverse head and shoulders pattern could be in the works. A strong close above the 200 SMA and 100 SMA would complete the pattern and bring BTCUSD to the neckline resistance which is around $9,596.08.
A strong bullish close above this price could trigger a potential rally to the recent highs of BTCUSD at $10,429.26 where it topped on June 1.
On the other hand, a bearish close below the low of June 15 at $8,900.00 would invalidate the chart pattern and could mean that sellers continue to dominate trading. Should this happen, we could soon see BTCUSD fall to its May 25 lows at $8,630.00.
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