Bitcoin Sees New Price Support From 7-Year-Long Rising Trendline
The job is getting tougher for bitcoin bears as the number of strong support levels is growing with each passing month.
The latest addition to the list is the support of the trendline connecting the November 2011 low and August 2016 low, currently at $5,830. Till Oct. 31, the two important support levels were the 21-month EMA and the trendline drawn between the June low and August low.
More importantly, the 21-month EMA was the level to beat for the bears till last month, meaning a close below that EMA was seen reviving the sell-off from the record high of $20,000.
While the 21-month EMA remains a crucial support, the new make or break level is the seven-year-long rising trendline.
This is because, the trendline support, which was located around $6,300 last month, has now moved closer to the current price and is seen rising above $6,300 next month. Hence, calling a break below the 21-month EMA as a sign of bear revival could prove erroneous.
At press time, BTC is changing hands at $6,330 on Bitstamp, representing a 0.50 percent drop on a 24-hour basis.
On the monthly chart, a break below the trendline support of $5,830 would strengthen the bear grip and allow a drop to the psychological support of $5,000.
The bulls, however, would feel emboldened if the cryptocurrency produces a strong bounce off that key support.
As for the next 24 hours, investors should keep an eye on the symmetrical triangle seen in the chart below.
As can be seen above, the upper edge of the symmetrical triangle, currently at $6,400, is proving a tough nut to crack. Hence, a break above that level would put the bulls in a commanding position, opening the doors for a rally to $6,756 (Oct. 15 high).
- The 7-year-long-rising trendline is the new level to beat for the bears.
- A symmetrical triangle breakout, if confirmed, could yield re-test of Oct. 15 highs above $6,750. On the other hand, a downside break would expose Oct. 11 low of $6,055.