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Bitcoin (BTC) – Daily Chart update
This morning we saw a US$3,000 or 6.5% move in bitcoin which took the price from US$44,700 to US$47,600. That is now an almost US$7,000 or a 17% move to the upside in the last week. What was also significant, was that there was a break out of the pennant formation that has been in play since the middle of January 2021.
The price is currently trading at US$47,100 and is acting in a major resistance zone that lies between US$47,000 and US$48,500.
Secondly, there is an orange ascending resistance line that comes from August last year which is also acting as resistance. Previously, the price got rejected on this line in both January and February this year.
Thirdly, quite a few big institutions trade BTC Futures from Monday to Friday, on the Chicago Mercantile Exchange (CME). As BTC is traded seven days a week, there is sometimes a “Gap” created between Friday evening price close and Monday morning’s price opening. These Gaps tend to get filled quite quickly in the following week.
This past Friday’s close was at US$44,800 and this morning’s opening price was at US$46,545, resulting in a huge US$1,700 gap that needs to be filled.
Taking all of the above into consideration, and together with a very high Stochastic Relative Strength Index (StochRSI) on the Daily Chart, there is a good chance that the price comes down to retest the breakout of the pennant, secondly, to come down to test the previous resistance level, which is now support, and thirdly, to also close the CME gap from this past weekend. A level to watch for the retest in the next couple of days will thus be between US$44,800 and US$45,600, which could provide a good level to enter into trades.
If the price does break higher above US$48,400, the next level of resistance is between US$50,000 and US$52,000.