Bitcoin buyers are making a play to the upside after sellers could not extend the price lower.
The price is currently trading near $84,518, up around $1,700, or 2.11%. The rally gained momentum after breaking above the 100- and 200-hour moving averages near $82,100. Buyers have now pushed above last week’s swing high near $84,178, giving them another technical break in their favor.
The buyers have taken back control in the short term. Now they need to hold it.
Where is the risk for buyers?
The closest risk-defining level is the broken swing high at $84,178. When the price breaks above resistance, traders want to see that level become support. Staying above it would keep the buyers firmly in control. Moving back below would take some of the momentum out of the breakout.
For traders giving the move more room, $83,000 provides another reference point. Below that, the 100- and 200-hour moving averages near $82,100 become the more important support area. A move back below both would weaken the bullish technical picture.
Those levels offer different amounts of breathing room, but more room also means more dollars at risk. Traders need to match their position size to the risk they choose.
What comes next on the topside?
The next upside target is $85,578, the lower boundary of an upper swing area within the broader range that has confined trading since September 18. Above that, the focus shifts to the range high at $87,374.
Getting above $84,178 is progress. Getting above $85,578 would be another step. Ultimately, buyers need to break and stay above $87,374 to open the door beyond the broader trading range.
The lesson is that a failed move in one direction can create an opportunity in the other. Sellers had their shot to extend lower. They missed. Buyers have responded by taking the price above the hourly moving averages and last week’s swing high.
In the video above, I take a look at the bitcoin breakout, the levels buyers need to hold, and the next targets that will help determine whether this rally has more room to run.
This article was written by Greg Michalowski at investinglive.com.
