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Bitcoin climbs to $9,700; where will it go from here?

Bitcoin climbs to $9,700; where will it go from here?

Disclaimer: This article contains technical analysis, which is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The content presented in this article is the opinion of the author. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence and consult with a financial advisor before making any investment decisions.

Bitcoin surged over 40 percent in the last few days after Chinese President Xi Jinping said that his administration would embrace blockchain technology. Now, BTC is at a pivotal point that could lead to new yearly highs or a correction to $9,000 or lower.

Bitcoin technical analysis

Based on its 3-day chart, Bitcoin appears to be trading within a descending parallel channel that formed since Sept. 26 following the peak at $13,800. Under this time frame, every time this cryptocurrency reaches the bottom of the channel it bounces off to the middle or the top. But, when it reaches the top, it falls back to the middle or the bottom.

BTC is currently trading at the top of the channel after a strong bounce off the bottom. At the current price level, Bitcoin could either break out of the descending parallel channel or pull back once again to continue consolidating within it.

A spike in volume could lead to a breakout, which will validate a major bull flag that is developing on BTC’s 3-day chart. This is considered a continuation pattern that formed after an upward movement that took Bitcoin to nearly $14,000, known as the flagpole, and was succeeded by the current consolidation period, known as the flag, which could result in a breakout on the same direction of the previous trend.

Upon the breakout point, the bull flag predicts a 70 percent target to the upside. This is determined by measuring the height of the flagpole, which could take BTC to hit $16,500.

Nonetheless, Bitcoin is facing a major resistance cluster on its 1-day chart given by the 100 and 150-day moving average. If the price of this cryptocurrency is rejected by these moving averages, then a pullback to the 200-day moving average ($9,000) is extremely likely. This could imply that BTC will continue consolidating within the descending parallel channel.

BTC US dollar price chart
BTC/USD by TradingView

At the moment, it seems like a move to $9,000 could actually be beneficial for Bitcoin’s bullish trend. This downward movement would fill a price gap that is currently open on the CME Group Bitcoin futures contracts chart.

CME Bitcoin futures gaps

Price gaps symbolize imbalances created in the market and, at their most basic form, represent a large mismatch between the number of buy and sell orders that have been filled. These usually occur on speculative assets across a variety of markets when there is high volatility after trading hours are closed.

The CME Group Bitcoin futures contracts are open from Sunday to Friday from 5:00 PM until 4:00 PM Central Time with a daily 60-minute break at 4:00 PM. During the most recent rally that saw Bitcoin rise more than 40 percent, a gap was left behind while CME’s trading hours were closed.

This price gap is between $8,715 and the current price of Bitcoin, which is approximately $9,700, at the time of writing. There is also another one that occurred the weekend of Aug. 9, representing a $100 gap between $11,795 and $11,695. Now, it remains to be seen which gap will be filled first.

BTC US dollar price chart
BTC/USD by TradingView

Overall sentiment

The crypto community appears to have turned bullish after the recent price action that took Bitcoin to a high of $10,480 on Oct. 26. Yet, the previous technical analysis tells that there is still an obstacle in sight. BTC must close above $9,850 for it to resume its bullish trend, but failing to do so could send it back below $9,000.

Even though a downward movement could prolong the bullish outlook, it could allow BTC to fill a price gap that can be seen on the CME Group Bitcoin futures contracts chart.

Bitcoin | BTC

Updated: Nov 7 at 2:51 am PDT
$9,560.44
3.65%

Bitcoin, currently ranked #1 by market cap, is up 3.65% over the past 24 hours. BTC has a market cap of $172.24B with a 24 hour volume of $32.59B.

Chart by CryptoCompare

Bitcoin is up 3.65% over the past 24 hours.

Posted In: , Price Watch, Technical Analysis

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Ali Martinez
Author

Ali Martinez

Technical Analyst @ CryptoSlate

After Ali began forex trading in 2012 In 2014, he came across Bitcoin’s whitepaper and was so fascinated by the idea of a decentralized, borderless, and censorship-resistant currency that he started buying Bitcoin. By 2015, he started traveling to spread the word about Bitcoin.

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Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.