Bitcoin Price Can Break $31k Resistance Area Without Significant Correction, Here’s Why?
Bitcoin is still maintaining its upward trend structure that has been forming since the beginning of the year. It is likely to break through the $31k resistance level without any significant correction.
Weekly Outlook
After hitting its lowest point at $15,400 in June 2022, Bitcoin started to increase and formed the right shoulder of an inverse head and shoulders (H&S) pattern. This is a bullish pattern that often leads to a reversal of the downtrend.
Indeed, the price broke out of the pattern in the week of March 13-20, 2023, with a large bullish candle, marking the formation of a long-term bottom. This technical pattern has a target of $35k, calculated by adding the height of the pattern to the breakout point.
Although the $31k resistance level rejected Bitcoin during the upward movement and created a bearish engulfing candle on the weekly chart, the bears were not able to take advantage of this to push the price lower.
This is particularly evident when Bitcoin created a large bullish candle in the following week with even higher volume than the bearish engulfing candle. It shows that the bulls are buying strongly on small corrections.
Therefore, there is a possibility that the BTC price will break through the $31k resistance level without any significant correction.
The weekly RSI indicator supports this possibility by creating a higher bottom and approaching the overbought zone.
In addition, the inverse H&S pattern has existed for 280 days, so the absence of any significant correction right after it was completed is something that can be considered.
Ascending triangle pattern
After a correction from $31k, the BTC price formed an ascending triangle pattern with a resistance line at $30,000 and a support line near $28,200. This is a bullish pattern that often leads to a breakout in most cases.
The 4-hour RSI indicator supports the possibility of a breakout as it has broken above its own descending resistance line. Such breakouts in RSI often precede a breakout in price action.
Therefore, the BTC price is likely to break out of the triangle pattern in the coming days.
This will pave the way for a breakout above the $31k long-term resistance level, as mentioned above.
Conclusion
The most likely outlook shows that the Bitcoin price will break out of the current pattern and then the $31k resistance level.
If so, the next target will be $35k.
This view may be affected if the price breaks down below the support line of the ascending triangle at $28,200.
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.
Read more:
- Bitcoin Surges 1% To $29K Following Federal Reserve’s 5%-5.25% Rate Hike
- Litecoin (LTC) Price Needs To Hold This Level To Avoid A Sharp Sell-Off