Yesterday was an exceptional day for Bitcoin as it broke past the $100,000 mark for the first time since early February. The sudden increase confirmed a strong breakout from a consolidation period that appears to be setting the stage for a potential retest of the cryptocurrency’s record high of $109,000 that was initially set in late January. This milestone were encouraged by investors worldwide to maintain focus on crucial overhead areas on the Bitcoin’s chart around $107,000 and $120,000 while additionally keeping tabs on key support levels near $100,000 and $92,000.
Bitcoin’s Rise and Implications
The explosive event that saw Bitcoin reclaim this historic value came after President Donald Trump announced that the U.S. had reached a trade agreement with the U.K. Alongside this, President Trump optimistically declared potential impending deals, and this fueled a global surge in Bitcoin and other stocks, causing stirrings of positivity for the weekend’s trade discussions with China.
The Cause of Bitcoin’s Rise
Between February and April, there was a notable decrease in Bitcoin’s price, with the impact of tariffs and their subsequent potential effect on the economy being key influencers. Additionally, the slower-than-expected pace of cryptocurrency industry reforms by the Trump administration also contributed to this decline. Despite this slight setback, Bitcoin has since found its footing and begun its ascent. Now, with this latest surge, Bitcoin’s value has risen almost 40% from last month’s low and is up 10% since the beginning of the year.
Bitcoin’s Chart and Overhead Areas
Bitcoin was worth $102,700 late last night after rising from an intraday low of roughly $96,000. Technical analysis reveals key price levels which need to be observed. After reclaiming the 200-day moving average (MA) last month, Bitcoin experienced a limited time of consolidation before breaking out decidedly above the significant $100,000 mark. This development has led to potential for a retest of the cryptocurrency’s record value of $109,000 that was achieved in late January.
Record High and Indications
On the other hand, the relative strength index confirms bullish price momentum with a reading above the 70 thresholds. However, it also warns of overbought conditions that may result in short-term profit-taking. This indicates that trading volumes on Coinbase, the major crypto exchange in the United States, have been declining since Bitcoin’s rise in early April. This suggests that larger market participants may be abstaining from the current rally. Therefore, it’s vital to look at two significant overhead areas on Bitcoin’s chart and identify crucial support levels.
Overhead Areas and Support Levels
The first overhead area to observe is around $107,000. This area will likely draw substantial attention due to the peaks of December and January that marked a double top pattern on the chart. Above the record high of the cryptocurrency, an overhead area can be projected by analysing the bar patterns. If assumed that a continuation move may play out, the analysis presents a possible upside target of around $120,000.
Profit-taking in the short term could see the cryptocurrency’s price come down to revisit the $100,000 level. Following today’s breakout above this psychological threshold, the level may flip from previous resistance to provide future support. However, if the bulls fail to defend this level successfully, a larger retracement could lower Bitcoin’s price to around $92,000. At this level, there is a confluence of support from the nearby upward sloping 200-day moving average and a trendline that ties together a range of corresponding trading action stretching back to late November previous year.
Note: The commentaries, opinions, and examinations expressed above are intended for informational purposes only and should not be considered as financial advice.
