With the number of strong support levels increasing for bitcoin (BTC), the bitcoin bears are facing an uphill battle.
The latest addition to the list is the support of the trendline connecting the November 2011 and August 2016 lows, currently at $5,830. Up to Oct. 31, the two key support levels were the 21-month EMA and the trendline drawn between the June and August lows.
In particular, the 21-month EMA was the level to beat for the bears till last month, meaning a close below that support would likely have revived the sell-off from the record high of $20,000 seen last December.
While the 21-month EMA still remains a crucial support, the new make-or-break level is the seven-year-long rising trendline.
That’s because the trendline support, which was located around $5,300 last month, has now moved closer to the current price and is seen rising above $6,300 in December. Hence, it may now be incorrect to call a break below the 21-month EMA a sign of a bear revival.
At press time, BTC is changing hands at $6,330 on Bitstamp, representing a 0.5 percent drop on a 24-hour basis.
On the monthly chart, a break below the trendline support of $5,830 would strengthen the bear grip and allow a drop to the psychological support of $5,000.
The bulls, however, would feel emboldened if the cryptocurrency produces a strong bounce off that key support.
As for the next 24 hours, investors should keep an eye on the symmetrical triangle seen in the chart below.
The upper edge of the symmetrical triangle, currently at $6,400, is proving a tough nut to crack on the daily chart. A break above that level would put the bulls in a commanding position, opening the doors for a rally to $6,756 (Oct. 15 high).
- The 7-year-long-rising trendline is the new level to beat for the bears.
- A symmetrical triangle breakout, if confirmed, could yield a re-test of Oct. 15 highs above $6,750. On the other hand, a downside break would expose the Oct. 11 low of $6,055.
Disclosure: The author holds no cryptocurrency assets at the time of writing.