Support and resistance levels and a descending triangle:
Hi friends, hope you are well, and welcome to the new update on Bitcoin ( BTC ).
The price action of the leading cryptocurrency is moving in a descending triangle since May 2021. There is also a price-level resistance at $39500 and support at $31000 and so far the candlesticks are closed below this support level.
Volume profile:
After placing the volume profile on the complete price action moving in the triangle we've can observe that there is a weak interest of the traders close to the support and strong interest even above the resistance of the triangle. The point of control of the volume profile is also above the resistance of the triangle. Therefore whenever the price action was moving above the point of control or below this level it was moving back to this POC of the volume profile.
To catch the recent trend I have placed the volume profile again after the 22nd of June and it can be noticed that the new point of control of the volume profile is also above the resistance of the triangle. Therefore the price action of Bitcoin is following the point of control of the recent volume profile and the previous volume profile as well and breaking out the resistance of the triangle.
Key level support zone:
If we zoom out the chart, then we observe that previously in the month of January 2021 the price action formed support at $28800 and now exactly this level has been re-tested and the priceline is now moving to the upside. It can also be noticed that from $31000 to $28800 we have a very important key level support. If it will be broken down then a long-term downtrend can be started. However, so far the price action is successful in re-testing this support level and likely to move up from here.
Confirmation for the breakout:
On the daily time frame, the previous candlestick is not able to completely close above the resistance of the triangle. For the confirm breakout we need a complete closing above the resistance of the triangle on the daily time frame. Here I would like to advise you to watch the closing on the daily time frame rather than on the small time frames. Because the small time frames can give false signals. Once we will have the closing above the resistance of the triangle then we should wait for the next candlesticks to close higher than the previous candlestick’s high which broke out the triangle.
Conclusion:
So far the price action of the king of all cryptocurrencies is following all bullish signals which were indicating the breakout perfectly. However, for the long-term rally, there are some more resistance levels still to be broken out. One of them is the price level resistance of $39500.
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