Latest Bitcoin Breakout: Is the Path to All-Time Highs Now Clear?
Bitcoin‘s daily candlestick chart may tire traders since, despite Monday’s surge, prices are still stuck in a protracted, aimless channel. But today, a less-followed three-line break chart points to a bullish perspective that favors a move to all-time highs. According to CoinDesk Indices data, the top cryptocurrency by market value experienced its largest one-day rise since August 23, when it surged more than 5% to $66,000.
According to the daily candlestick chart, BTC is still stuck in a seven-month corrective descending channel, indicated by trendlines linking highs in March and June and lows in May and July. The chart nevertheless points to a neutral view. However, the three-line break chart indicates that the entire uptrend from October 2023, lows around $30,000, has restarted, with Monday being the breakout of the extended falling channel.
Three-Line Break Chart: A Guide to Identifying Bullish and Bearish Reversals
The three-line break chart may resemble a candlestick chart, but it ignores time and concentrates on price movements and trend shifts. This helps traders gauge the current trend and any trend reversals while removing noise and erratic price fluctuations.
Green and red vertical blocks known as lines or bars make up the line break chart. A bullish reversal occurs when the price is above the highest point of the previous three red lines, which is shown by a new lineup (green bar). The price moves below the lowest point for the last three green lines, indicating a bearish reversal and the formation of a new red line. The price confirming an extension of the established uptrend by moving over the preceding green line is known as a bullish continuation. As can be seen above, that is exactly what occurred on Monday, with the green bar breaking through the trendline off the highs of March and April.
Failed Breakouts: Could Bitcoin Face Deeper Declines After $70K Resistance?
Although the line break chart’s breakout suggests that there may be room for a rebound to new highs, traders should keep an eye on two things. The first is the candlestick chart, which demonstrates that since March, bulls have continuously failed to establish a foothold over $70,000. Around that point, prices might run into strong opposition once more. On the line break chart, the second item to look for is bullish invalidation, which is indicated by a new red bar that pulls prices back inside the channel. As was seen in late September, failed breakouts frequently result in deeper price declines.
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