It’s Breakout Tuesday
Today’s technical analysis is about the breakout in BTC, which will be changing the picture for the coming week(s) quite substantially.
As noted during the last few days, charts of the top 10 coins were (and still do!) look bullish.
Nevertheless, we have been wary of the lacking volume, which is an essential component for healthy moves up. What we have seen in the past week, until today, were exactly those types of healthy moves: in alts first, and, today, in BTC.
The ascending triangle was resolved with force to the upside, resulting in a $1,000 move within one hour during the early morning in Europe.
The brutal move higher followed a textbook reversal to the 50% retracement level (speaking of the Bitmex Perpetual Swap), whereas spot markets with less leverage and shorts in pain retraced to the 38% level (although not having printed highs as the futures markets did previously).
Technically, this move will possibly have further legs to the 5,500 – 5,600 resistance area. In order to achieve this goal, a close above the cloud (at 5,800 – 5,900, in red), as visible in the chart, will be very important. Another very important goal for today is a close above the 200 daily moving average (orange line in the chart), which currently comes in at 4,600.
The big picture: strong support will be the red bar (former resistance zone) at 4,200; the next resistance will be 5,500, and then at the heavy volume zone between 6,200 and 6,500.
ETH exited the ascending triangle as well, but with much less vigour than BTC, and is currently trading right at its 200 daily moving average at 150, which might act as a minor resistance for now.
The next resistance to take out is 160, which will then lead the way to the resistance zone of 200 – 230. This has yet to happen.
Support is close at 140, and only a move below the downside level at 115 would make us think a bearish development might be likely.