Bitcoin’s range limit is likely to be breached with a bullish breakout

An analyst who predicted a collapse in Bitcoin price in mid-May says the current range is likely to be reversed upwards.

Katie Stockton, Founder and Managing Partner of Fairlead Strategies, said:

“The consolidation itself is neutral, but we think a breakout is more likely than a collapse. The medium-term momentum is improving based on the MACD histogram. “

Bitcoin has been trading between $ 30,000 and $ 40,000 since late May. The range has narrowed even further in the past 2 weeks as the bulls were unwilling to push the price above $ 36,000 and sellers refused to step back below $ 32,000.

A large and bullish move seems overdue as the weekly chart’s MACD (an indicator of strength and trend changes) rises higher after the low in mid-June.

Bitcoin weekly chart | Source: Fairlead Strategies, TradingView

Successive non-deep bars below the zero line indicate the seller’s exhaustion. Meanwhile, the stochastic indicator continues to reflect oversold conditions below 20.

“Medium-term oversold conditions create stability above $ 30,000, which has proven to be strong support for Bitcoin.”

Stockton said the breakout is expected to be confirmed on a consecutive daily close above the 50-day simple moving average (SMA) at $ 35,500. That will open the door to the next resistance near $ 44,000.

The 50-day SMA is one of the most watched technical lines. Stockton mentioned it as a defense for the bulls in April when price traded above this moving average. The SMA support was broken on April 20th and then sold in May.

“No moonshot” for Bitcoin unless these key levels break

On the flip side, veteran trader Peter Brandt said that Bitcoin price will not rise until a rally can be carried out that removes key areas of resistance.

Brandt says Bitcoin has been stuck in a range between $ 30,000 and $ 40,000 for over 3 weeks, showing that the bulls are not currently controlling the market.

“At the moment, the price cannot be out of the ordinary. 23 consecutive days of activity in the lower half of the trading range. There is no moon shot until he can get out of there. “

Source: Peter Brandt

According to Brandt’s chart, Bitcoin faces two levels of resistance above $ 35,000 and $ 40,000. He used to be speak that bulls must take action to keep the market from falling any further.

The veteran trader said the head and shoulders pattern (H&S) formed almost 2 months ago is complete as BTC is about 30% below the cutout break. Traders view the head and shoulders pattern as a bearish signal as it predicts a possible uptrend reversal.

“The head-and-shoulders peak in the BTC chart, which was completed in mid-May, has achieved its goal.”

Source: Peter Brandt

Brandt also monitors DOGE’s share price development. According to him, the coin also forms a head and shoulder pattern with cutout support at $ 0.20.

Source: Peter Brandt

Although the head and shoulders pattern looks bearish, traders have emphasize that a DOGE trend reversal will not necessarily occur, as technical trading patterns often fail.

Minh Anh

According to AZCoin News

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