Bitcoin Needs Daily Close Above $76,000 To Confirm True Breakout: Expert Analyst
Bitcoin (BTC) is closing in on its all-time high (ATH), creating excitement among bullish investors. However, experienced analyst Peter Brandt advises caution, urging bulls to remain hopeful but avoid being overly confident.
Bitcoin Breakout Yet To Be Confirmed
Following a slow start to October – a historically positive month for Bitcoin – the digital currency is currently trading at $71,789, just about 3% below its March 2024 ATH of $73,737.
While the possibility of a new ATH has the crypto market on edge, veteran analyst and trader Brandt believes several conditions must be met to confirm a legitimate breakout.
In a recent post published on X on October 29, Brandt cautioned BTC bulls against being overly optimistic without technical confirmation of a breakout.
In particular, the analyst warned about the limitations of diagonal patterns – especially those with slanted boundary lines – on trading charts.
Brandt explained that although hitting a boundary line might excite the bulls, it does not signify a confirmed breakout.
According to Brandt, for a breakout to be considered genuine, the target price is set at $76,000. This means that Bitcoin’s daily chart must close above this level, with an average true range (ATR) measurement confirming this move above Bitcoin’s previous high set in March.
For those unfamiliar, the ATR is a technical analysis indicator that measures market volatility by calculating the average of true price ranges over a set period of time, typically 14 days. It provides insight into an asset’s movement, helping traders assess potential price fluctuations and set more informed stop-loss or profit targets.
Furthermore, Brandt notes that such a breakout must be validated by a close on Sunday at midnight UTC to ensure that it is not a false breakout that ends up trapping bullish investors.
Regarding the weekly chart, Brandt emphasized that Bitcoin’s recent progress “has only grazed important chart points,” rather than breaking through them with conviction.
The analyst concluded that BTC’s price still has a significant journey ahead before it can decisively form a new support level.
Overcoming $71,000 – $73,000 Resistance Level is Key
Another crypto analyst, 0xAmberCT, highlighted the importance of the strong resistance zone around $71,000 to $73,000. However, the analyst provided several reasons why this time may be different.
Firstly, the high probability of the Republican US presidential candidate Donald Trump winning might provide the much-needed boost to the wider crypto market and kickstart its Q4 2024 rally.
As of now, Polymarket indicates that Trump has a 66.5% chance of victory compared to Democratic candidate Kamala Harris’ 33.5%. A Trump win would be beneficial for the digital assets industry.
In addition, recent interest rate cuts by the US Federal Reserve (Fed) and the increased likelihood of a “soft-landing” are expected to enhance the market’s risk-taking appetite. Risk-on assets like BTC are anticipated to thrive in a low interest rate environment.
The assessment of these analysts coincides with Bitwise CIO Matt Hougan’s prediction that BTC could “melt-up” to $80,000 in Q4 2024.
However, crypto analyst Cole Garner recently suggested that BTC might experience a decline before achieving a new ATH due to tightening on-chain liquidity. BTC is currently trading at $71,789, up 4% in the past 24 hours.