What you need to know
- Bitcoin will be the focus of attention to begin this week. The cryptocurrency is on the verge of breaking the $100,000 barrier for the very first time.
- Bitcoin’s price has increased by 40% in the last few days since Donald Trump won his election on Nov. 5. The increase is due to expectations that a crypto-friendly Congress and administration will be formed.
- Recent price movement of the cryptocurrency has broken through a pennant formation, signaling that its bullish trend will continue.
- A bars pattern which repositions trending price bars before the pennant from the top trendline in the pattern projects a price goal of approximately $118,000.
- Investors should watch important support levels on Bitcoin's chart around $93,000 and $70,000.
The focus of the week is Bitcoin (BTCUSD), as it sits at the edge of the $100,000 threshold for the first.
Price of digital assets fell in the weekend trades after rising to just under $98,000 on Friday.
Bitcoin has risen by around 40% since Donald Trump’s election win on November 5. This is due to the expectation of a crypto friendly administration and Congress. Since the beginning of 2018, Bitcoin has grown by approximately 130%.
We analyze the technicals of Bitcoin’s chart below and identify key price levels for investors to be aware of.
Pennant Breakout
Bitcoin’s price continues to rise sharply since breaking above an eight-month range of trading. A bullish golden crossing in late October confirmed the new trend.
Early last week the cryptocurrency price broke through a pennant-like pattern, signaling that its bullish trend would continue.
Importantly, trading volumes remain at their highest levels since March, indicating institutional adoption by larger market players, such as asset managers and hedge funds.
We’ll use technical analysis to predict where Bitcoin’s future price could be heading and identify some important support levels that we should watch during periods of profit-taking.
Bars Pattern Price Target Monitor
Investors may use a bars chart pattern to project how Bitcoin will continue its upward trend.
The technique is to reposition the trending price bars of the cryptocurrency that preceded the pennant from the top trendline. This suggests a bullish target price of $118,000 which the price could test before entering a consolidation phase.
Keep an eye on the Support Levels
When pullbacks occur, it is worth keeping an initial eye on the $93,000 mark. Investors looking to take advantage of the recent bullish momentum in the cryptocurrency market may want to look for entry points near the top of this pennant pattern.
Bitcoin’s value could fall even further, possibly to $70,000. This is a key level on the chart which would probably attract buyers who are interested in the trading ranges’ top trendline. This region may also coincide with the 200-day moving trendline, depending on when it occurs.
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The author of this article does not own any securities listed above as of the date of writing.
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