Can Bitcoin Turn Resistance To Support, To Close Over Bear Trend?

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Can Bitcoin Turn Resistance To Support, To Close Over Bear Trend?

Posted on September 24th, 2018 in Bitcoin News,Technical Analysis by Tom Whitbread

Bitcoin has risen above the month-long bear trend that has seen the king of crypto continually reject and revert to test lower levels, forming a triangle across higher timeframes. Can this resistance turn to support in the coming weeks and a new trend emerge?

The long-running downward pressure since the $10k highs of May has seen BTC price action swing high to touch just above $8000 since, albeit to find resistance and sharply reverse to test lower levels. Each swing has seen slightly higher lows and lower highs, creating a tightening zone forming the point of a descending triangle. This is certainly becoming the current point of interest for many analysts in determining the recovery rally for the market, or if we will see lower lows.

A breakout above the headline resistance of $6500 on the next swing would be enough to close doubts on continuation towards the downside. As a comparison to many commodities when forming price action in a triangle, such as gold and silver. You can see how the breakout to the downside is the most common case. 

If we see Bitcoin continue to break out to the downside, through this first 2/1 Gann angle at $6500 and towards the baseline support, at around 6000 - a play to then test lower at 5700 is probable. 

For the bullish play - first this downswing will need to find support at lower $6500 to high 6300s, for enough time to bring the next cross in order (a bullish golden cross) when we see this bullish move, the price can target the 0.382% Fibonacci level at $7300 and beyond.