What is Happening with BTC/USD?
BTC/USD Up 50% This Year
Bitcoin versus the US dollar (BTC/USD) has unquestionably been an outperformer. BTC/USD is up more than 50% year to date, and nearly 10% this month. However, we have to consider that the majority of the outperformance materialised in the first quarter of this year when the major crypto pairing hit an all-time high of US$73,845. Since then, buyers and sellers have been squaring off amid two descending limits between the said record peak and a low of US$56,478, commonly referred to as a descending channel among technical analysts.
Bitcoin versus the US dollar (BTC/USD) has unquestionably been an outperformer. BTC/USD is up more than 50% year to date, and nearly 10% this month. However, we have to consider that the majority of the outperformance materialised in the first quarter of this year when the major crypto pairing hit an all-time high of US$73,845. Since then, buyers and sellers have been squaring off amid two descending limits between the said record peak and a low of US$56,478, commonly referred to as a descending channel among technical analysts.
The question is whether the descending channel is simply the pairing consolidating before printing another leg higher, or is it a sign of weakness that could eventually see the unit explore lower price levels.
Breakout Above Resistance?
Looking at the daily timeframe for a more magnified view, price action is seen testing resistance at US$63,791 and although sellers have made an appearance from the level, buyers remain strong. This follows a break above (and retest of) the 200-day simple moving average, currently circling around the US$59,085 region, which in itself is a bullish trend reversal signal.
Looking at the daily timeframe for a more magnified view, price action is seen testing resistance at US$63,791 and although sellers have made an appearance from the level, buyers remain strong. This follows a break above (and retest of) the 200-day simple moving average, currently circling around the US$59,085 region, which in itself is a bullish trend reversal signal.
Given the room to navigate higher on the weekly chart towards the upper boundary of the channel, a breakout above daily resistance should not raise too many eyebrows. Conservative traders attempting to trade any breakout higher will unlikely commit without a filter, such as a retest of the breached resistance to form support or even a ‘time’ filter (for example, the number of days price spends above the level).
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