Bitcoin has been gridlocked around $9k, but that will likely end in the near future
Based on the chart setups, there is a good chance we see the grid-lock at $9k resolved in the very near future.
In fact, there is a decent chance that resolution happens as soon as next week.
The only question is whether that resolution will be to the upside or the downside.
There are two solid support zones just below where we are currently and a couple solid resistance areas overhead as well.
They can be seen on this chart:
(Source: https://www.tradingview.com/x/KlaEV1ar/)
The bullish case...
As you can see there is an ascending trendline there on the chart above that bitcoin is just barely above right now.
Base on that trendline, the price is either going to ride it, which will push it higher in the near term or it is going to knife through it, which will likely cause some continued selling possibly pushing the prices down to the lower support areas.
However, even in that case there are some strong moving averages that are looking very bullish.
We have the 100 and 200 day moving averages both pointing up below the price.
Plus we had the 100 crossing the 200 to the upside with both pointing up. Technically that is considered a Gold Cross, though many like to use the 50 crossing over the 200. Either way, the setup is historically a very bullish moving average setup.
Plus, if we zoom in we can see that the overall chart pattern appears to be rounding out a bottom.
Check it out:
(Source: https://www.tradingview.com/x/ti0j4eIP/)
After a period of lower lows during this most recent consolidation, we have seen a couple higher lows just recently.
This could be indicating the bottom is in and prices are ready to move higher.
Plus with such a tight trading range and decreasing volume, we should see increasing activity should the price break this range, something like this:
(Source: https://www.tradingview.com/x/4eBJqXxB/)
The bearish case...
As you can see above the price is sitting basically at an inflection point with a tighter and tighter trading range.
The volatility is at extremely low levels for bitcoin's standards..
A break in either direction will likely cause an exacerbated move as volume increases once that tight range is broken.
A break to the downside could look something like this:
(Source: https://www.tradingview.com/x/yNI8rObp/)
The first major support is down around $8,600.
If that support is broken we could look at a drop to around the $7,500 range as there is not much support once that $8,600 level breaks.
Personally I am betting on a break to the upside as macro tailwinds will likely continue to lift prices higher.
There is likely going to be another major stimulus program announced in the coming weeks that may works as the catalyst bitcoin needs to break out of its current trading range to the upside.
Stay informed my friends.
-Doc