With another roadblock out of the way, the bitcoin price may be headed for a breakout.
Of note for traders is that the bitcoin-US dollar (BTC/USD) exchange rate has moved past the falling trend line hurdle. As per CoinMarketCap, the cryptocurrency has gained 4.72% in the last 24 hours. At press time, BTC/USD is trading at $3,950 levels; up 1% week-on-week, but still down 9% on a monthly basis.
The recent lethargic price action in bitcoin is mainly due to investors waiting on the sidelines as they seek clarity out of China on the fate of its domestic bitcoin exchanges. Already, there is speculation that the exchange “ban,” which took place suddenly this month, but was never formalized, may be temporary.
However, the fact that bitcoin has breached the falling trend line hurdle tells us that investors are treating no news out of China as good news. Slowly but surely, investors are veering toward a bullish outlook.
For now, that means price action analysis certainly favors the bulls.
The chart above shows the trend line sloping downward from the September 2 high and September 8 high has been breached. It marks the end of the lower highs pattern.
As discussed yesterday, the move added credence to last week’s bullish doji reversal and higher lows pattern, and has opened doors for $4,200-$4,300.
The break above the trend line hurdle has also increased the odds of bitcoin repeating the July pattern- rebound from the 100-day moving average in the wake of an oversold RSI, followed by a rally to record highs.
Only an end of the day close below Monday’s low of $3,669 would abort the bullish view.
Spacecraft image via Shutterstock
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