Bitcoin surged over 40 percent in the last few days after Chinese President Xi Jinping said that his administration would embrace blockchain technology. Now, BTC is at a pivotal point that could lead to new yearly highs or a correction to $9,000 or lower.
Bitcoin technical analysis
Based on its 3-day chart, Bitcoin appears to be trading within a descending parallel channel that formed since Sept. 26 following the peak at $13,800. Under this time frame, every time this cryptocurrency reaches the bottom of the channel it bounces off to the middle or the top. But, when it reaches the top, it falls back to the middle or the bottom.
BTC is currently trading at the top of the channel after a strong bounce off the bottom. At the current price level, Bitcoin could either break out of the descending parallel channel or pull back once again to continue consolidating within it.
A spike in volume could lead to a breakout, which will validate a major bull flag that is developing on BTC’s 3-day chart. This is considered a continuation pattern that formed after an upward movement that took Bitcoin to nearly $14,000, known as the flagpole, and was succeeded by the current consolidation period, known as the flag, which could result in a breakout on the same direction of the previous trend. Read More...