Key Takeaways
- Bitcoin hit another record high Monday after surpassing the closely watched $125,000 level over the weekend for the first time ever.
- The cryptocurrency broke out from a two-month descending channel last week, potentially setting the stage for a continuation move to the upside.
- Bars pattern analysis forecasts a bullish move to around $160,000 that may play out over the next 12 weeks. Investors should watch major support levels on Bitcoin’s chart around $107,000, $92,000 and $74,000.
Bitcoin (BTCUSD) hit another record Monday after climbing above the closely watched $125,000 level over the weekend for the first time ever.
The largest cryptocurrency by market value has rallied as appetite for risk remains strong and as investors use bitcoin (and gold) to hedge their bets against geopolitical uncertainty and high government debt, in what JP Morgan analysts have referred to as the “debasement trade.” A growing pool of traders is also buying tokens as more crypto ETFs are launched and cryptocurrencies become more integrated into financial services. Last week, bitcoin ETFs recorded inflows of $3.2 billion, the second-highest haul since they launched in January 2024.
Bitcoin’s price has soared 34% since the start of the year, outpacing major stock indexes, but trailing safe-haven gold’s 50% return over the same period. The digital currency was trading at $125,500 recently, after hitting an all-time high today of around $125,800.
Below, we take a closer look at bitcoin’s weekly chart and apply technical analysis to point out major price levels worth watching out for.
Descending Channel Breakout
Bitcoin broke out from a two-month descending channel last week, potentially setting the stage for a continuation move to the upside.
Moreover, the relative strength index confirms bullish momentum and sits well below its December peak, providing ample room for the cryptocurrency to move further into price discovery before consolidating.
Let’s forecast how a new move higher might look on bitcoin’s chart and also identify major support levels worth monitoring during possible downturns.
Where is Bitcoin’s Price Headed Next?
Investors can use bars pattern analysis to forecast where bitcoin’s trend may be headed next if a new move higher plays out.
To apply the analysis, we take the uptrend comprising the bars from late April to mid-July and overlay them from the low of last week’s breakout bar. This projects a potential bullish move to around $160,000 over a 12-week period if a similar trend occurs on the chart.
It’s worth noting that this earlier trend commenced following a 10% weekly advance from a prior descending channel on the chart, similar in size to last week’s breakout from the recent pattern.
Major Support Levels Worth Watching
During pullbacks, investors should initially monitor the $107,000 level. This area, currently situated just above the 50-week moving average, could attract buying interest around last month’s low and prominent highs that formed on the chart in December and January.
Selling below this level could see the cryptocurrency’s prices test support near $92,000. Investors may look for entry points in this location close to a period of consolidation that developed on chart just below the December and January peaks.
Finally, a more significant correction in bitcoin’s price could trigger a decline to the $74,000 level. The cryptocurrency’s price finds a confluence of support in this region from the prominent March 2024 peak and this year’s notable April trough.
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As of the date this article was written, the author does not own any of the above securities.
