Bitcoin Breaks Above $4.1k as Bullish Momentum Prevails

On the 4hr chart, Bitcoin has confirmed a bullish continuation pattern by breaking above the previous ascending triangle. When an asset enters an ascending triangle, price will break to the upside roughly 70% of the time. In the chart below, Bitcoin has demonstrated a textbook example of this pattern.

A bullish confirmation will occur when Bitcoin forms support above the $4.1k resistance level. It is important to note that this level is also a prior high. If we break to the upside and pass through resistance at the $4.1k – $4.2k level, then the confirmation of the ascending triangle will lead to the expectation of more bullish action in the short-term. An increase past $4.2k would also confirm a higher high, possibly indicating a turning point in the bear market.

Throughout the past few days, Ethereum has displayed an ascending triangle pattern nearly identical to Bitcoin’s. At the time of writing, this breakthrough was confirmed with Ethereum increasing into the $155 price channel.

We can create a short-term price target by taking the largest part of the triangle, measuring it, and then extrapolating it from where the move started (top level of resistance at $4k). As a result, we get a short term price target of $4.1k. At the time of writing, Bitcoin has wicked passed $4k and has been temporarily rejected at $4.1k. While the bulls have significant momentum, if a rejection were to occur, it would likely happen at the $4.1k level due to historic resistance.

If Bitcoin can create support at the $4.1k level, the bulls will be able to confirm a higher high at roughly $4.1k – $4.2k. This would be a significant turning point for the bear market because Bitcoin has not been able to create a higher high in over 14 months. If a rejection at $4.1k were to occur, it would create a double top which would likely hinder bullish momentum. From a macro perspective, a bearish rejection could send Bitcoin down to previous resistance levels around $3.7k.

For the bulls to stay strong, they need to break above resistance at $4.1k and create support at the same level. If the bulls can sustain this price action, they will have the momentum to drive Bitcoin to $4.2k and even $4.5k which would create a higher high and mark a potential turning point in the bear market.

Disclaimer: Charts are from tradingview.com. I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers on the recent state of the cryptocurrency market. The author of the article owns Bitcoin.