- Bitcoin has hit the top of its eight-month channel after a bullish start to November
- Crossing the trendline and establishing a support/resistance flip would set Bitcoin up for a huge upward move
- Rejection here would likely only be a temporary setback given Bitcoin’s strength
Bitcoin has crossed the top of an eight-month upward channel, hitting $14,400 for the first time since January 2018, with a swift escalation in price likely should it break through. Following four weeks of positive price action Bitcoin is still showing surprising strength, with the continued confusion over the U.S. election playing a role, meaning that volatility could be a feature of the next week.
Pullback Swiftly Bought Up
As we posited on Monday, following four green weeks in a row a pullback was to be expected, which indeed we got. However, where we would normally have expected the rejection to continue there was instead a snap back at $13,200, which has seen the price rebound and hit our upper target of $14,300-$14,350, which represents the top of the channel that started in March:
What Bitcoin does in the next 24 hours will give us a very clear indication of its medium term strength. Were it to break through the top of the channel we could be looking at a parabolic move toward $17,000, although we would ideally like to see prior resistance flip to support before such a move for confirmation.
If Bitcoin can’t break through the resistance line within the next 24 hours however, then we will likely see a retrace, with heavy recent support at $13,265-$13,550. A drop through this could see Bitcoin look for further support in the $13,000 region.
Election Debacle Causing Confusion in the Markets
With the U.S. election still undecided, global markets are in a state of limbo, meaning that high volatility could still be on the cards until the situation is resolved, making this an unsafe trading environment for many.
Whichever way Bitcoin goes from here in the short term, it is clear that the general trend is up and any retraces are clearly for buying.