Bitcoin Breakout Predicted
Bitcoin has consolidated and fought against some short term resistance, while also forming strong support. This has created some strong and powerful bullish continuation moves.
Bitcoin breaks short term resistance
The chart above shows a triangle pattern. This triangle has two different definitions in technical analysis, but they are both shared and complementary to one another. The first is a description and the theory of the triangle itself and the other is the behavior of this pattern after a specific movement in price. The triangle above is known as a symmetrical triangle. According to (in my opinion) the greatest authority on these kinds of patterns, Thomas Bulkowski, there are some characteristics associated with a symmetrical triangle pattern:
1. Two trendlines should form the triangle and then join at their point of intersection (the apex).
2. Price must ‘ping pong’ (my words) from side to side – preferably without excessive ‘space’ in the triangle.
3. Volume recedes and can be low the day prior to a breakout from the triangle.
4. The breakout can occur in any direction.
5. The breakout often occurs between 70-75% of the way towards the apex (according to his study of 1.347 symmetrical triangle patterns.
The second pattern and definition of this triangle is known as a Bullish Pennant. Bulkowski also has characteristics for the bullish pennant.
1. There should be a ‘flag pole’ – or a strong and swift rise up.
2. Converging trendlines, just like a symmetrical triangle (but it doesn’t have to be symmetrical).
3. Volume drops off as the pattern continues.
4. A breakout can occur in any direction.
5. Shorter life span (the pattern is not a long timed pattern).
As we analyze the current pattern and how it relates to Bitcoin’s price action and overall trend, we can safely assume that we have a bullish continuation pattern. Given the nature of Bitcoin’s overall bullish move since the beginning of 2019, and given the major support found at the 2/8th Major Harmonic (5041.75), I predict that prices will break further to the topside as long as buyers remain in control. I would expect some resistance to be found against the shared area of the 0.75 Fibonacci arc and a yearly high of 5488. However, given that consolidation and continuation patterns like the Bullish Pennant, it is entirely possible that we get a kind of ‘loaded spring’ action and see prices vault much higher – perhaps blasting through the 5500 area to test the 2/8th inner harmonic at 5671. The next major zone for Bitcoin to test is the 6300 value area. Many predict that 6k is the next important zone – but it is actually 6300, as it is the 4/8th inner harmonic between our most recent major support at 5041.75 (2/8th Major Harmonic) and the 3/8th Major Harmonic at 7562.13. I would predict that Bitcoin tests the 5671.85 level sometime before May 5th, 2019. After that, I would anticipate a probable fast move to test 6301 sometime before July 16th, 2019. But if we have a fast-moving market that tests these levels in a fast manner, then I would definitely forecast a rest of 6932 before that July 16th, 2019 date.