BTC Tests HUGE Resistance! Upside Break Could Reach 17,200!

MagicPoopCannon Updated   
Here on the daily BTC chart, we can see that it's currently contending with massive resistance. That resistance has been generated by a convergence of a two-and-a-half year-old falling trendline (in black) and the 38.2% retracement level of the 2018 bear market (in red.)

Now, before we get into the analysis, I think it's really important for people to understand the conditions of the analyses, especially when we are at technical junctures such as this. We can see that price has risen dramatically from the March low of 3900. While you may suspect we could be topping here, there is definitely a possibility of a surge higher.

I want to draw your attention to the times BTC has tested the falling black trendline. When it happened the first time in 2017, there really was no "trendline" but it was a sharp peak. Again, when it was tested in 2019, there were sharp pivot reversals back to the downside. Then, we can see that BTC spent a bit more time at it in February, before ultimately plummeting to the downside. Now, here we are a few months later, right back at the falling black trendline — only this time, we're spending even more time testing it. So, there is clearly an increase in the time that BTC is spending around this trendline, and that could be an indication of an upcoming breakout. Furthermore, we can see that BTC did break above it a few times. So, that is also noteworthy.

Probably the most interesting feature on this chart is the descending broadening wedge (in pink.) Descending broadening wedges are generally viewed as bullish formations. However, research has shown that they have only a slightly higher than 50% chance of breaking to the upside. Either way, all we can do is wait to see if it actually produces an upside breakout. To find the price target for a descending broadening wedge, traders will generally take a measurement of the widest part of the formation, and add it to the breakout point. I've done that with the dashed vertical pink trendlines. You can see that it actually projects a price target around the 17200 level, which is right near the high of January 2018.

So, if BTC can print a solid breakout here, and get above 10600, I think there is a very good chance that it will take out the 14000 level, and rally all the way up to the projected target of 17200.

I have to stress the importance of the conditions of the analysis here. If BTC rolls over and starts falling away from the resistance that it's battling, and it fails to produce an upside breakout, then it wouldn't be wise to continue to expect a bullish outcome. I see potential, but BTC has to prove itself by first conquering the resistance that it's contending with.

I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.

***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***

BTC is struggling under that resistance today. Its important for everyone to remember that BTC still hasn't made a higher high.


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