Bitcoin Breaks Out to $5.4k! 6K Incoming?

Bitcoin’s 4hr chart above has recently broken out of an ascending triangle to a high of $5,422. The ascending triangle was not the most textbook of indicators due to its formation, nevertheless, it has broken to the upside for a bullish confirmation.

When viewing the weekly chart from a macro perspective, we can see that Bitcoin is currently on a green ‘1’ from the sequential indicator above. Therefore, it is not a tradable candle on the weekly scale. In principle, you should never trade a green ‘1’ above a green ‘9’, instead you should wait for confirmation in which the green ‘2’ goes above the green ‘1’, and THEN closes above the previous ‘9’ candle.

The daily chart above is currently on a ‘6’ candle which has slightly more room to the upside if the sequential indicator can reach a ‘9’ candle later in the week. It’s possible Bitcoin could test up to $5.5k if a green ‘9’ candle occurs three days from now. However, Bitcoin’s daily RSI is at 84 which is overextended and therefore likely overdue for a reasonable pullback. Furthermore, Bitcoin’s RSI is losing strength as price continues to increase which may indicate the deceleration of a trend and a tentative pullback.

With the RSI overextended and the trend nearing exhaustion, it may be time for the longs in the market to take profit as we experience a healthy pullback.

Current resistance remains at $5.5k while Bitcoin’s support levels are now established at $5k and $5.2k. Overall, $6k remains the strongest resistance level in Bitcoin’s history and it will likely take multiple attempts to break above it.

Disclaimer: This is not financial advice. I am not a financial adviser. Nothing in this article should be considered financial advice. These are observations and opinions on the market. Please do your own due diligence and make objective decisions. The author of the article owns Bitcoin.