The circumstances have rapidly evolved since the weekend!
Bitcoin (BTC/USD) is expected to finish another day with a strong position against the US dollar.
The Research Team included the following information in the week-ahead post (shown by italics):
On the daily timescale, a significant technical observation is the formation of an ascending triangle pattern between the price levels of $34,758 and $37,999. This pattern is of special interest to those who study chart patterns and indicates a market that is heading upwards. Ascending triangles are identified as chart patterns that indicate the continuance of an uptrend. Traders often purchase the breakout over the top limit of the triangle and set a profit target based on its base value, which in this instance is $41,223. Last week, the price broke through the top border of the ascending triangle, indicating a shift in momentum towards buyers looking for a breakout. Additionally, it is worth noting that the support level at $37,624 was recently challenged again, which had previously acted as a resistance level. This movement further strengthens the likelihood of an upward breakout.
On the daily timeframe, the price reached the profit goal of the ascending triangle at $41,223 today and encountered nearby resistance around $41,500.
What is the future trajectory for the major cryptocurrency?
Is it appropriate to consider a change in direction?
Are we simply pausing momentarily?
Are we moving towards elevated levels?
All of these questions are legitimate.
Based on the Relative Strength Index (RSI), the monthly chart is currently reaching overbought levels that have not been observed since early 2021. Additionally, the daily chart is showing initial signs of bearish divergence from oversold territory. This indicates to traders and investors that the BTC/USD pair is now overpriced and may see either a downward correction or a period of consolidation, pausing its upward movement, after reaching a daily resistance level of $41,500.
However, it is important to note that the weekly timeframe indicates the potential for further upward movement until reaching a resistance zone located between $46,112 (1.272% Fibonacci projection ratio, based on the 'alternative' AB=CD pattern) and the horizontal resistance level at $42,971. In addition, both the weekly and daily periods are exhibiting an upward trend.
The BTC/USD market continues to be favorable for bulls.
Based on the information provided, the market is still favoring buyers, and the current daily resistance level may be weak or easily broken. Hence, if the price surpasses $41,500 on a daily basis, it may indicate a potential upward trend towards the daily resistance level of $43,828. This level is situated inside the weekly resistance range indicated before, which spans from $46,112 to $42,971. After a potential upward breakout, cautious traders will probably want to retest the $41,500 level as a support before making any commitments.
