Bitcoin bulls have won yet another descending channel breakout, causing short-term price action to bounce off a key support around $9,500 and push price levels back to 5 digits.
Bitcoin Monthly Chart
On the monthly XBT/USD, we can see a doji forming on the latest candle as the head sits in the middle of two large wicks. Typically, a Doji can go in any direction and is heavily dependant on the overall trend of the coin. In this case, BTC is still very much bullish so we are assuming an upside continuation will ensue over this time frame. Volume right now are still sustaining levels way above that seen throughout the bull run in 2017 and 2018.
POC (Point of Control) has yet to move up from $6,430 meaning the highest amount of volume or trades exchanged throughout this bullish phase on BTC still remains quite low. This will be a very bullish sign as it shows us high volume is exchanging hands at this level and represents a new critical support level. More information on this key support level can be found in my previous analysis.
Bitcoin Hourly Chart
On the 1 hour XBT/USD chart, we can see the second descending channel break clearly with price action now attempting to create a small bull flag just below the 200EMA. The volume appears to steady with no real jumps during this breakout. This suggests that Bitcoin bears are really struggling to build up momentum inside this time frame.
Maxx Momentum has crossed to the upside painting green in conjunction with this breakout after displaying red throughout the descending channel. POC still remains back at the top of the channel at $10,500 as mentioned in my previous analysis, which will likely as act as a magnet for price action thus making a sensible profit target on this move upwards.
The previous range local high was $9,400 before BTC went on to reach just shy of $14,000 meaning the previous breakout point has already been re-tested for BTC. When a breakout occurs many traders will wait for a pull-back and re-test of the breakout point before entering. BTC has already re-tested the previous breakout point and bounced quite significantly back up to $11,000. From this, we know that support around $9,400 is very strong and will require a lot of selling pressure to break.
Do you think BTC will hit POC at $10,500 over the coming days as a result of this most recent breakout? Please leave your thoughts in the comments below!
Images via Shutterstock, Bitcoin chart by Tradingview
None of the information/ opinions in this article should be construed as financial advice.