As of this writing, Bitcoin (BTC) is trading at around $8,765. It was previously trading in a tight range from the $9,100 – $9,500 areas. In previous writing, we mentioned a new trading range that looked to range from $8,800 – $11,000. Although we are not far from the recent breakout, that range has not come to fruition. Instead, we see the tighter $9,100 – $9,500 range playing out.
It is important to note, that support at $8,500 is holding so far. This $8,500 area is the previous resistance. In the chart above, the upper trend line from the larger descending channel (green line) rests around $8,300. Traders can look at the $8,300 – $8,500 area as a make or break area. If the price holds above, it can be said the breakout and trend reversal remains intact, and we may see the price continue to rise from here. If the price closes and remains below the $8,500 area then we can say the break has failed and we may trade back in the previous range of $7,200 – $8,500 (white box).
This pullback and test of the support level can be healthy if we see bulls come in and make buys at these lows. Without confidence in the breakout and trend reversal we may see more sideways trading at the previous range well into the holidays.