- A 15-month trendline is acting as a crucial resistance area
- After falling through two weeks ago, Bitcoin has twice been rejected from reclaiming it
- Higher highs and higher lows suggest that it hopefully won’t be too long before it is breached again
Bitcoin is battling a 15-month trendline dating back to the March 2020 crash, a line which held until last week and could signal that we should temper our bullish momentum. Bitcoin’s rejection at $36,500 yesterday saw the trendline act as a concrete ceiling, although a pattern of higher highs and higher lows suggests that Bitcoin may be on the verge of regaining it in the near future.
Born During the March 2020 Crash
The trendline in question takes its start point from the bottom of the March 2020 crash and takes in several other price points all the way up through the 2020 bull run:
As we can see, price touched it in October 2020 before the race to $65,000, and wicked down to it during the following collapse in May. Bitcoin seemed to be holding up until this month, when it finally succumbed and dropped through the trendline, since when it has failed in its attempts to reclaim it:
The most recent attempt to overcome this trendline came yesterday, and although Bitcoin failed to cross and dropped $2,000 as a result, the structure being painted is one of higher lows and higher highs since the most recent drop to $30,000. This suggests that another attempt should be the one to break through, after which it would be good to see Bitcoin using the trendline as support.
Bitcoin Trendlines Don’t Predict Price
Of course, trendlines cannot predict price only reflect it, but the longer established a trendline is the more validity it has and the more it is seen as a key area of resistance or support. We saw this with Bitcoin in 2018, and whether you believe that trendlines are coincidence or actually representative of trends, such trends cannot be ignored completely, especially when price continues to react to them.
