BTC technical analysis: a short-term breakout may create an opportunity

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Bitcoin technical analysis shows that BTC seems to continue increasing towards $20,000 and a short-term breakout may create an opportunity.

Bitcoin Creates Long-Term Double Top

During the week of Dec 1-7, Bitcoin (BTC) price created a small bullish candlestick which briefly took it to a new all-time high (ATH) of $19,888 on Dec. 1 before falling.
The weekly candlestick followed a Doji candle from the previous week, a sign of potential strength after a period of indecision.
While this could look like a potential double top pattern relative to the high from December 2017, technical indicators have not shown any weakness.
A decisive breakout above the current resistance zone would likely take Bitcoin into a price discovery phase due to the lack of overhead resistance.
Despite this, technical indicators in the daily time-frame look bearish.
The RSI has generated a bearish divergence, the MACD is falling and is almost negative, while the Stochastic oscillator has made a bearish cross and is going downwards.
If it were to fall, the closest support area would likely be found back at $16,000. The next support levels beneath that are found at $14,850 and $13,650.

Possible Breakout

Lower time-frames offer a more bullish outlook. A look at the six-hour chart indicates that BTC is now trading inside the $19,400 resistance zone, making its fourth attempt at breaking out.
On Dec. 1, Bitcoin deviated above this zone before returning to fall back below. It has made two other breakout attempts since.
Both the RSI and MACD are rising. The former is above 50 while the latter above 0, supporting the possibility that BTC will be successful in breaking out.
The two-hour chart indicates that a breakout above a symmetrical triangle has already been completed, and BTC is in the process of validating the resistance level as support.
A breakout that travels the entire height of the pattern would take BTC just above $20,800.

BTC Wave Count

The movement inside of and breakout from the triangle afterward shows that this was likely the fourth wave of a bullish impulse that started on Nov. 27. If correct, BTC has just begun the fifth wave.
Fib extensions are in alignment, and all offer a possible target between $22,100-$22,600.
The target is found from (from left to right):

  • The 4.61 Fib extension of wave 1
  • The 3.61 external Fib retracement of wave 4
  • The length of waves 1-3 projected to the bottom of wave 4.

BTC technical analysis shows that Bitcoin is expected to break out from the $19,400 area and continue its ascent towards the range of $20,800-$22,000.

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