On our yesterday’s Bitcoin price analysis we mentioned the triangle that breaking it would lead a strong move. We didn’t know what direction, but we could expect a strong move.
As you all might have noticed, the direction was up – the move was extreme! It was the highest ever reached trading volume for one hour in Bitcoin’s short history. The amazing green candle had created a massive short squeeze, this happens when many people have short positions on heavy leverage, so a small movement up can trigger someone’s stop loss. Hence, when a short gets closed it creates a new buy order, that could lead to an effect we’ve witnessed yesterday.
Finally, the consolidation area between $6,660 to $7,500 had broke up. This is a very bullish sign for the short-term and for the longer as can be seen on the Bitcoin 1 Day chart below. What can also be seen is that we broke up the long-term descending trend line on the 1 Day chart.
As of now, next target levels is the $8,400 resistance and afterwards the $9,000 strong resistance level. RSI is very high so we can expect a correction back to the $7,500-$7,800 area, where also MA-200 lies (resistance turned support).
BTC/USD BitFinex 4 Hours chart
BTC/USD BitFinex 1 Day overview chart