Bitcoin (BTC) saw small gains last night, but the weak move did little to further the bull case.
The target resistance level to beat yesterday (long-term descending trendline) was $8,285. A high volume close (as per UTC) above that mark would have signaled a long-term bullish trend reversal.
The daily chart below shows bitcoin closed yesterday at $8,273 on Bitfinex, meaning the breakout remained elusive. However, a new 24-hour candle (as per UTC) opened above the descending trendline support (seen today at $8,230), creating a false picture of a bullish breakout.
So, while it appears as though the bull breakout has happened, the move is more of a sideways breach (unconvincing breakout) of the long-term trendline hurdle.
As such, the major level to watch out for on the high side is now $8,460 (April 15 high). A convincing move above that level would establish higher highs and higher lows pattern (bullish setup) and would likely confirm a longer-term bull reversal.
The risks of a pullback are still high, given the unconvincing breakout. A failure to hold above the descending trendline support (former resistance) of $8,230 could yield a drop to $7,823 (April 17 low).
The key levels to watch out for in the next day or two are resistance at $8,460 (April 15 high) and support at $7,823 (April 17 low).
As of writing, BTC is changing hands at $8,310 on Bitfinex.
- A daily close (as per UTC) above $8,460 would open up upside towards $9,000-$9,177 (March 21 high).
- A move below $7,823 would indicate the rally from the April. 1 low of $6,425 has ended and could yield a sell-off to $7,200-$7,000.
Bitcoin image via Shutterstock