Hello traders, I hope you've all had a successful trading week.
Here we have BTC/USD on the 4H chart.
BTC/USD has been trading within structure since a rally paused on the 17th December and began to correct. Price has recently been trading within a structure, between the horizontal support zone at 12600, and at a side-wards resistance, at 15210 (At current days level)
Price has broken out of the side-wards resistance. When price was testing the support previously it was making higher lows. But on the last retest of support on January 2, it is having clear higher lows on smaller timeframes, which indicates bullish momentum which was an early clue that price was going to breakout.
I am expecting Bitcoin 5.59% to continue successfully breaking out. Before this, price will likely retest the sideways resistance, as a support line, before having a strong up move.
This trade could play out in 2 days, I have outlined these below:
-Price successfully breaks out and closes above resistance, and then retests the side-wards resistance as support at around 14800 before confirming and going to the upside, eventually reaching upside target at 19580.
-Price breaks out, and does not retest the side-wards support zone . Instead, price continues to the highs and it corrects at a later stage, before reaching the target zone at 19580.
Bare in mind, that price could move a lot further than the targets outlined above. The target above is merely an obstacle for price action as it is the previous swing high.
If price retests the resistance line as support first, this might indicate slightly more weakness than if price immediately has an impulse leg and leaves structure behind. This is the behavior Bitcoin 5.59% exhibits when in a legitimate uptrend. When it is legitimately impulsive to upside, it tens to ignore retests.
I will updating this analysis if it receives more than 40 likes.
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