Key Takeaways
- Bitcoin has surged to its highest point since February and is back within reach of the psychological $100,000 level.
- In a win for the bulls, the pioneer cryptocurrency staged a breakout above a pennant pattern Thursday, setting the stage for a continuation move higher.
- Investors should watch crucial overhead levels on bitcoin’s chart around $100,000 and $107,000, while also eyeing key support near $92,000 and $85,000.
Bitcoin (BTCUSD) has surged to its highest point in more than two months, putting it back within reach of the psychological $100,000 level.
The digital asset rallied Thursday after reports surfaced that investment bank Morgan Stanley is looking into adding spot cryptocurrency trading to its E*Trade platform sometime next year. Sentiment also received a boost after Strategy (MSTR), the world’s largest corporate holder of bitcoin, said it plans to acquire more bitcoin through a $21 billion equity offering.
Bitcoin is up about 30% from its early-April low as investors have sought to diversify their portfolios amid uncertainty surrounding the Trump administration’s trade policies and their potential impact on the economy. Amid recent market turmoil, bitcoin and stocks have occasionally moved in opposite directions, evidence to some investors that the cryptocurrency is finally showing its worth as a safe haven.
The legacy cryptocurrency was at $97,000 recently, still below its record high of around $109,000 in January but up from last month’s low below $75,000.
Below, we take a closer look at bitcoin’s chart and apply technical analysis to identify crucial price levels worth watching out for.
Pennant Pattern Breakout
After breaking out from a a descending channel last month, bitcoin’s price rallied sharply before consolidating in a narrow pennant pattern.
In a win for the bulls, the pioneer cryptocurrency staged a breakout above the pennant’s top trendline Thursday, setting the stage for a continuation move higher. Moreover, the relative strength index confirms bullish price momentum, with the indicator edging toward overbought territory.
However, it’s worth pointing out that trading volumes remain below average during bitcoin’s recent bullish price action, suggesting larger market participants may remain on the sidelines.
Let’s identify two crucial overhead areas on bitcoin’s chart that investors may be watching and also locate key support levels worth eyeing during future pullbacks.
Crucial Overhead Areas to Watch
The first overhead area to watch sits at $100,000. This crucial location would likely provide resistance near the round number and a horizontal line that links a range of trading activity on the chart between November and February.
A more bullish move could see bitcoin’s price test overhead resistance around $107,000. Investors who have accumulated the cryptocurrency at lower prices may decide to lock in profits at this level near the prominent December and January swing highs. This region also roughly aligns with a projected bars pattern upside target that takes the impulsive move higher that preceded the pennant and repositions it from the pattern’s breakout point.
Key Support Levels Worth Eyeing
During pullbacks, investors should initially eye the $92,000 level. Retracements to this area may attract buying interest near the low of the pennant pattern, which also aligns with several peaks and troughs on the chart stretching back to last November.
Finally, a breakdown below this key technical level opens the door for a drop to $85,000. Investors may seek entry points in this area near the February low and a period of sideways drift on the chart prior from bitcoin’s breakout from the descending channel last month.
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As of the date this article was written, the author does not own any of the above securities.
