Bitcoin (BTC) breaks major resistance
The 3/8th Major Harmonic at 7562.13 was broken as resistance. Short term resistance that was identified on Monday (January 6th, 2019) is the current new resistance level.
Bitcoin (BTC) breaks the 3/8th Major Harmonic
In yesterday’s article, I described Bitcoin setting up for an imminent breakout higher from the 3/8th Major Harmonic at 7562.13. Bitcoin did breakout above that significant resistance and has moved significantly higher, as much as over +5% for the day. The performance of Bitcoin since January 3rd, 2020, has been extremely positive. Since the open on January 3rd to the current price (8088), Bitcoin has gained +16.69%. This represents one of the single most significant gains over the past seven months for Bitcoin.
Additionally, the first resistance level that we identified yesterday, the 2/8th inner harmonic at 8192.22. The 2/8th inner harmonic is a powerful and natural pivot level. This is especially true when price moves above the 3/8th Major Harmonic and tests the 2/8th inner harmonic for the first time. From a price action perspective, the 2/8th inner harmonic represents the most overbought condition on the chart, but only after price has successfully moved above the 3/8th Major Harmonic.
On Bitcoin’s Point & Figure chart, we can see a very bullish event has occurred. I’ve previously identified a buy signal for Bitcoin when it reaches 7800. The reason for this buy signal is because 7800 is a break of the double top formed at 7600. Additionally, the entry occurs with a break of the 45-degree angle of the June 2019 swing high. The current dominant downtrend angle is from the August 2019 swing high. But the psychological importance of downtrend angle from the last major swing high in Bitcoin is, perhaps, more critical than the actual dominant angle. The Point & Figure chart above is $200 box/3-box reversal chart. At the present time, Bitcoin is up over +$200. If Bitcoin continues on this current column, then we should be aware of the price levels at the other downtrend angles:
The $9200 value is the present dominant downtrend angle that must be broken to convert to a fully bullish market. But what if we see a series of reversals that generate some fakeouts and whipsaws? Lower prices for a breakout. Every time a new column is created, the price level for a breakout decreases. It is doubtful that we will see a continuation of any bear movement, but if there is, we need to be mindful of any move that breaks the $6400 value area. The current setup across multiple charts on multiple timeframes show a major change in the direction of Bitcoin since the fall in June 2019. We are, as predicted, very likely seeing the turn around of this market and the resumption of a new bull trend that will yield new higher highs, new higher highs and, ultimately, new all-time highs. But don’t be surprised if we see some sideways movement leading into the halvening event for Bitcoin – there is no clear consensus on what kind of effect this halving event will have on the market.