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Bitcoin (BTC) Rejected By The $28.4k Resistance Level, what next?

Bitcoin has confirmed a long-term bullish reversal pattern and broken out of a bearish pattern. The uptrend is expected to continue.

The Federal Reserve’s balance sheet continued to grow over the past week. As of March 22, it had increased by $393 billion since the banking crisis.

Weekly outlook

After hitting a low of $15.4k in June 2022, Bitcoin began to rise and formed the right shoulder of an inverse head and shoulders (H&S) pattern. This is a bullish pattern, often leading to a trend reversal to the upside.

Indeed, the price broke out of the pattern in the week from March 13 to 20, 2023 with a large bullish candle, marking the formation of a long-term bottom. This technical pattern has a target of $35k, calculated by connecting the high of the pattern to the breakout point.

After the breakout, price is faltering at the minor resistance area of 28.4k. However, with the pattern formed over more than 9 months, the post-breakout movement could be very strong. Therefore, the price is expected to break through the $28.4k resistance and move to the next resistance at $32k and beyond to the H&S target of $35k.

The RSI indicator supports this view by creating a higher high and being above 50.

bitcoin-analysis
BTC/USDT weekly chart. Source: TradingView

Ascending parallel channel

Bitcoin has been trading inside an ascending parallel channel since the beginning of January 2023. This is a bearish pattern, often leading to breakdowns in most cases.

However, after reconfirming the channel support line on March 10 (blue arrow), the Bitcoin price rose strongly and broke out of the pattern on March 17. This indicates that the upward move is impulsive.

The price is currently in the process of flipping the channel resistance line into support. If successful, the price will make another attempt to break above the $28.4k level.

A retracement back into the pattern could see Bitcoin drop to the strong support zone of $24k-$25k, formed by the horizontal support level, Fib 0.5, and the channel midline. Afterward, Bitcoin will make another breakout attempt.

bitcoin-analysis
BTC/USDT daily chart. Source: TradingView

Conclusion

The most likely outlook suggests that Bitcoin will continue to rise in the coming period.

The bullish view will be invalidated if Bitcoin breaks below the $24k-$25k level. If so, Bitcoin could drop to the support line of the pattern at $21.3k and breakdown thereafter.

Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.

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