Key Takeaways
- Bitcoin remains in focus to start the week as the cryptocurrency sits on the precipice of crossing the $100,000 mark for the first time.
- Since Donald Trump’s decisive election victory on Nov. 5, Bitcoin has surged around 40% amid expectations of a crypto-friendly administration and Congress.
- The cryptocurrency’s price has recently broken out from a pennant pattern, signaling a continuation of its strong bullish move.
- A bars pattern, which takes the trending price bars that preceded the pennant and repositions them from the pattern’s top trendline, projects a price target of around $118,000.
- Investors should watch important support levels on Bitcoin’s chart around $93,000 and $70,000.
Bitcoin (BTCUSD) remains in focus to start the week as the cryptocurrency sits on the precipice of crossing the $100,000 mark for the first time.
After rising to around $99,800 on Friday afternoon, the digital asset’s price eased slightly in weekend trading and was trading at just below $98,000 recently.
Since Donald Trump’s decisive election victory on November 5, Bitcoin has surged around 40% amid expectations of a crypto-friendly administration and Congress. Year to date, the cryptocurrency has soared about 130%.
Below, we analyze the technicals on Bitcoin’s chart and identify important price levels that investors may be watching out for.
Pennant Breakout
Since breaking out above an eight-month trading range, Bitcoin’s price has continued to trend sharply higher, with a bullish golden cross in late October confirming the new uptrend.
Early last week, the cryptocurrency’s price broke out from a pennant pattern, signaling a continuation of its strong bullish move.
Importantly, trading volumes remain at their highest levels since March, indicating institutional adoption by larger market players, such as asset managers and hedge funds.
Let’s apply technical analysis to project where Bitcoin’s price may be headed next and identify several important support levels to watch during profit-taking periods.
Bars Pattern Price Target to Monitor
Investors can use a bars pattern, a chart-based tool, for projecting how Bitcoin’s continuation move may play out.
To apply the technique, we take the cryptocurrency’s trending price bars that preceded the pennant and reposition them from the pattern’s top trendline. This predicts a bullish price target of around $118,000, a level the price may test before moving into a consolidation phase.
Important Support Levels to Watch
During pullbacks, it’s worth initially keeping an eye on the $93,000 level. Investors who are seeking to capitalize on the cryptocurrency’s recent bullish momentum may look for entry points in this area toward the top of the pennant pattern.
A more significant drop could see Bitcoin’s price revisit lower support around the key $70,000 mark, a location on the chart that would likely attract buying interest near the prior trading range’s top trendline. Depending on the timing of such a move, this region could also align with the upward sloping 200-day moving average.
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As of the date this article was written, the author does not own any of the above securities.
