By Tomasz Wisniewski, Alpari
What is the name of the instrument that was extremely popular at the end of 2017 and is now in the shadows? Yes, that’s right, it’s bitcoin. What can we say about this crypto now, slightly more than a year after the bubble burst? We are in a mid-term bullish correction, so I think that a good description would be: slowly but surely. Since the middle of December, BTC is, actually was, in a symmetrical triangle pattern (red lines). This formation has allowed the price to climb from roughly 3,000 to around 4,000 USD. A year ago, nobody would bat an eyelid at a rise like this, but now it is something!
The reason that we’re writing about bitcoin today is that the recent price movements allowed it to break a super important resistance. Two resistances, in fact. First one is the upper line of the aforementioned symmetrical triangle. The second one is the long-term downwards trend line (the one connecting lower highs since February 2018). Although I am not a fan of this instrument, I have to admit that the current price action is positive.
In theory, the most recent bullish breakout opens the way towards the long-term horizontal resistance at 6,000 USD. That would mean a 50% rise in value, which is quite good considering the latest volatility. That is the base scenario for now. The positive sentiment will be denied if the price comes back below the upper line of the triangle. That would mean a false breakout and would open the way towards the orange area, slightly below 3,000 USD.