As expected, bitcoin did follow the lead of other cryptos in breaking out of the consolidation zone shown in the green box. This had followed a relatively prolonged and violent downward trend phase. Now it's broken to the upside, what happens?
Firstly, question whether it has actually broken out. There may be some interpretational ambiguity as to where exactly the prior downward trend phase became a consolidation phase and thus where the consolidation zone upper boundary is. However, I have reason to consider it as shown in this chart, meaning bitcoin has in fact broken to the upside.
With that in mind, the signs are pointing to a new trending phase to the upside which could potentially take the price much higher. But before getting excited about potential price targets, consider the biggest threats to this new uptrend. The first major resistance hurdle that needs to be overcome is at the 0.382 level shown around $8730. The market is likely to see at least some degree of resistance here, but it will probably be very minor. In the case that the market does reverse here, watch whether it retraces back as far as the consolidation zone again. Returning here would be a sign of weakness in any bullish moves.
Breaking above the 0.382 level however will give a degree of optimism to the bulls. Since this level was used as a price barrier historically during the downtrend, there's a good chance there are a lot of bullish orders set around here. This could give a rising market a boost. This is the first significant level I'm watching. Let's see how the market responds to it, if it reaches it.
Firstly, question whether it has actually broken out. There may be some interpretational ambiguity as to where exactly the prior downward trend phase became a consolidation phase and thus where the consolidation zone upper boundary is. However, I have reason to consider it as shown in this chart, meaning bitcoin has in fact broken to the upside.
With that in mind, the signs are pointing to a new trending phase to the upside which could potentially take the price much higher. But before getting excited about potential price targets, consider the biggest threats to this new uptrend. The first major resistance hurdle that needs to be overcome is at the 0.382 level shown around $8730. The market is likely to see at least some degree of resistance here, but it will probably be very minor. In the case that the market does reverse here, watch whether it retraces back as far as the consolidation zone again. Returning here would be a sign of weakness in any bullish moves.
Breaking above the 0.382 level however will give a degree of optimism to the bulls. Since this level was used as a price barrier historically during the downtrend, there's a good chance there are a lot of bullish orders set around here. This could give a rising market a boost. This is the first significant level I'm watching. Let's see how the market responds to it, if it reaches it.