Key Takeaways
- Bitcoin has surged up to its highest point in February and is again within reach of $100,000.
- The bulls won the day Thursday when the pioneer cryptocurrency broke out above a pennant-like pattern, setting up a move higher.
- Investors should watch crucial overhead levels on bitcoin's chart around $100,000 and $107,000, while also eyeing key support near $92,000 and $85,000.
Bitcoin (BTCUSD), which has been at its highest level in over two months, is now within reach of the psychological $100,000 mark.
The digital asset rallied Thursday after reports surfaced that investment bank Morgan Stanley is looking into adding spot cryptocurrency trading to its E*Trade platform sometime next year. The sentiment was also boosted by Strategy (MSTR), world’s largest corporate bitcoin holder. MSTR announced plans to buy more bitcoins through a $21-billion equity offering.
Bitcoin is up around 30% from its low of early April, as investors seek to diversify their portfolios in the face of uncertainty regarding the Trump administration’s trade policies and the potential impact they may have on the economy. In recent market turmoil bitcoin and stocks sometimes moved in the opposite direction, proving to some investors that cryptocurrency is finally proving itself as a haven.
The legacy cryptocurrency was at $97,000 recently, still below its record high of around $109,000 in January but up from last month's low below $75,000.
Below, we look at the bitcoin chart and use technical analysis in order to identify important price levels.
Pennant Pattern Breakout
After breaking out of a downward channel last month bitcoin’s prices surged before consolidating into a narrow pennant.
The bulls have won the day as the pioneer cryptocurrency has broken out above the pennant top trendline on Thursday, setting the stage to continue the upward movement. Moreover, the relative strengths index confirms bullish momentum in the price, with the indicator moving towards overbought.
It’s important to note that the trading volume remains below average during bitcoins recent bullish price movement, suggesting that larger market participants could remain on the sidelines.
We’ll identify two key overhead areas on the bitcoin chart that investors might be watching, and also locate key levels of support worth eyeing when future pullbacks occur.
Important Overhead Areas To Watch
The first area to monitor is $100,000. This important location would likely provide some resistance near the round number, and a horizontal axis that links a range in trading activity between November and Febraury.
Bitcoin’s price could test resistance at $107,000 in a more bullish move. Investors that have purchased bitcoin at lower price points may decide to lock-in profits at the current level near the notable December and January highs. This area also roughly aligns to a projected bar pattern upside target, which takes the impulsive upward move that preceded the pennant pattern and repositions the pattern from its breakout point.
Key Support Levels Worth Eyeing
Investors should aim for $92,000 during pullbacks. Retracements near this area can attract interest from buyers. The low of the pennant is also aligned with several peaks and valleys on the chart dating back to last November.
A breakdown below the key technical level could lead to a fall of $85,000. Investors can look for entry points near the February low, and the sideways drift that occurred on the chart before bitcoin’s breakout last month from the descending trend.
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