We mentioned in a previous post from the end of September, Bitcoin needed to break through the $8,500-$8,800 range to escape a small horizontal (yellow rectangle) trading channel and a larger descending (green line) trading channel. Over the weekend, Bitcoin did just that.
As we can see from the above chart, Bitcoin has broken through these trading ranges and has entered a previous, higher trading range (white rectangle) which lasted from June 2019 to September 2019. This range is from roughly $9,100 to $10,700. Although there is support around the $9,100 area, the major support is the top of the descending channel (green lines) which is roughly the $8,600 are. This is the area which was previous resistance and is now support.
This current move was pretty massive and explosive considering Bitcoin was trading around $7,400 before the big two day move. The move was coupled with good volume as well, but we want to see Bitcoin stabilize and consolidate at or above the current price ($9,300 or so at the time of this writing), before the next leg up. A nice pennant formation preceding a move to the upper range of the channel would be great followed by more consolidation and a breakout to recent highs.
Keep in mind, if the price does break below and back into the previous two trading channels, we would need a day or two of price stability in those ares to confirm a breakdown.