Bitcoin Needs Daily Close Above $76,000 To Confirm True Breakout: Analyst
Bitcoin Nears All-Time High, But Is a Breakout Confirmed?
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Bitcoin (BTC) is closing in on its all-time high (ATH), generating excitement among bulls. However, seasoned analyst Peter Brandt advises caution, urging bulls to stay excited while avoiding dogmatic views.
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Breaking Through Resistance: A Technical Perspective
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Despite a lackluster start to October, historically a bullish month for Bitcoin, the digital asset is trading at $71,789, just 3% shy of its March 2024 ATH of $73,737. While the potential for a new ATH has the crypto market buzzing, veteran analyst and trader Brandt believes multiple conditions must be met to confirm a breakout.
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In a post published on X on October 29, Brandt cautioned BTC bulls against excessive enthusiasm without technical confirmation. He highlighted the limitations of diagonal patterns, especially those with slanted boundary lines, on trading charts. Brandt explained that while “nicking” a boundary line might excite bulls, it doesn’t signify a confirmed breakout.
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For a genuine breakout, Brandt sets the target price at $76,000. He states that Bitcoin’s daily chart needs to close above this level, with an average true range (ATR) measurement confirming this move above Bitcoin’s previous high set in March. The ATR, a technical analysis indicator, measures market volatility by calculating the average of true price ranges over a set period, typically 14 days. It helps traders gauge potential price fluctuations and set informed stop-loss or profit targets.
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Furthermore, Brandt emphasizes that this breakout must be validated by a close on Sunday at midnight UTC to ensure it’s not a fake breakout that traps bullish investors. On the weekly chart, Brandt observes that Bitcoin’s recent advance has only “nicked important chart points,” rather than breaking through decisively.
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Overcoming Resistance Levels and Fueling the Rally
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Another crypto analyst, 0xAmberCT, highlights the significance of the strong resistance zone around $71,000 to $73,000. However, this analyst presents several reasons why this time could be different.
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The high likelihood of Republican US presidential candidate Donald Trump’s victory could provide the much-needed fuel for the broader crypto market to initiate its Q4 2024 rally. Polymarket currently gives Trump a 66.5% chance of victory compared to Democratic candidate Kamala Harris’ 33.5%. A Trump win is generally considered positive for the digital asset industry.
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Additionally, the recent interest rate cuts by the US Federal Reserve (Fed) and the increased prospects of a “soft-landing” are anticipated to bolster the market’s risk-taking appetite. Risk-on assets like BTC are expected to benefit in a lower interest rate environment.
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Divergent Opinions on Bitcoin’s Future
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These analysts’ assessments align with Bitwise CIO Matt Hougan’s prediction that BTC may “melt-up” to $80,000 in Q4 2024. However, crypto analyst Cole Garner recently expressed a different viewpoint, suggesting that BTC might dip before reaching a new ATH due to tightening on-chain liquidity.
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At press time, BTC trades at $71,789, up 4% in the past 24 hours. The market awaits to see if Bitcoin can break through the resistance level and confirm a true breakout, setting the stage for further bullish momentum.
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Featured image from Unsplash, Charts from X and Tradingview.com