Bitcoin Breaks Out From a Crucial Resistance Level

After a potential short-term decrease, the price is expected to continue moving upwards towards the next closest resistance area.

Weekly Bitcoin Outlook

During the week of Oct 5-11, the Bitcoin price created a bullish candlestick, increasing from a low of $10,525 to a high of $11,469.

While this is a bullish development, the price is still trading below the major $12,000 resistance area, which it has not traded above since July 2019. A breakout above the $11,700 level should allow for the price to increase all the way to $14,000.

The increase has been ongoing since BTC re-tested the $10,000 area as support at the beginning of September. Technical indicators are bullish, and the MACD just made a higher momentum bar after having decreased for four weeks in a row.

Breakout From Resistance

The daily chart for BTC shows that the price has broken out from:

• A descending resistance line that had been in place since the Aug 17 high.
• The $11,200 area, which previously acted as support and is the 0.618 Fib retracement level of the most recent decrease

If the price continues increasing, there is minor resistance at $11,600 and major resistance at $12,070, both coinciding with the aforementioned long-term resistance area outlined in the previous section.

Technical indicators in the daily time-frame are bullish. The MACD, RSI, and Stochastic Oscillator are all increasing. Furthermore, the MACD has reached positive territory and the Stochastic Oscillator has made a bullish cross.

Therefore, Bitcoin is expected to soon make an attempt at breaking out above $12,000.

Possible Retracement

Despite the bullishness from the long-term price action and indicators, the shorter-term chart looks more bearish.

The price has been struggling to move above $11,400 and weakness has started to show. The 6-hour RSI has generated some bearish divergence and the MACD has begun to decrease.

The 2-hour chart looks even worse considering the bearish divergence and MACD flipping negative.

Therefore, a decrease towards the 0.382-0.5 Fib levels between $11,017-$11,131 would be expected before the upward move continues.

To conclude, the Bitcoin price is expected to eventually make an attempt at breaking out above the $11,600-$12,000 resistance area. A short-term decrease is likely to occur prior to the breakout attempt.

For BeInCrypto’s previous Bitcoin analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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