BTC Technical Analysis Update

Two weeks ago we wrote the morning report BTC Crossroads. In this piece we studied the BTC chart noting two technical trends, a longer-term bull trend, and a short-term bear trend. BTC has seen a nice rally over the last 7-days, due in part to several geopolitical and economic headlines hitting the tape. We will be coming out with a more fundamental piece on the thesis of why BTC should seriously be considered an allocation in one’s overall portfolio later this week. For now, let us focus on the chart and review what we are seeing below.

Since our last breakdown of the chart, we have extended the purple long-term channel, and also added two black trendlines we see of importance. The black horizontal trendline (roughly $11,000 BTC) connects two different points of resistance we saw in 1) the orange cluster of resistance and 2) the lowest magenta high. Two weeks ago, we noted that although we had been short-term bearish, the 4th low in black was not lower than the 3rd blue low and could be signaling accumulation in the ‘Oversold Territory’.

As BTC rallied back INTO the purple channel over the last week, we came upon the horizontal black line of resistance once again. This is when the Trump tariff news, as well as China devaluing their currency came out, in which BTC gapped higher. We observed that this gap higher went IMMEDIATELY to the downward sloping trendline that connects the two major highs of $14,000 at the end of June and mid-$13,000’s high in July.

Early this morning we breached this downward sloping trendline, but sold back off pretty quickly, represented by the teal curve. It will be very interesting to see if this bullish momentum can propel BTC to the top end of the purple channel, which would price BTC back into the mid-$13,000’s. A continued rally would take BTC back to the highs made last month and certainly test any resistance that would likely form there.

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