BTC testing double local resistance... what next?

12 בינו׳ 2023

Here we are looking at BTCUSD on the Weekly TF…

Let’s begin by taking a look at the key zones that Bitcoin is interacting with NOW.

Currently, BTC is testing two resistance lines. The first line we’ll look at, is the resistance of the parallel price channel that BTC has been trading within since price broke down from the FTX news in late November. What’s interesting about the timing of this test of resistance, is that it perfectly aligns with the resistance of the downwards sloping trend line (yellow). So, not only is BTC testing the resistance of its local channel, but also another strong local resistance AT THE EXACT SAME TIME…

So what should we expect…

Let’s consider both a bullish and bearish scenario.

Beginning with the Bullish scenario, you can see that the strongest resistance which acted as strong support during the bull-market for Bitcoin (blue) has gone untested since breaking down back in June of 2022. If BTC is able to break out and close a weekly candle confidently above its two resistances, we may expect a relief rally which could take us all the way up to that zone.

While that is certainly the more exciting outcome, we must consider what will happen if BTC gets rejected by its current double resistance zone (as previously mentioned). If rejected, Bitcoin will likely head back towards support of the sideways (parallel) price channel.

We will continue to monitor this chart, and provide timely updates as the chart continues to develop.

What do you think will happen next for Bitcoin?

Cheers!