The pressure was building for Bitcoin to break above the technically-important $4200 level over the past several weeks and today it finally gave way.
The breakout gave rise to further follow-up technical buying above this level this morning as a cluster of buy stop orders were triggered from breakout traders and some short sellers were forced to close out their bets. It will be interesting to see if the buyers will now be able to hold their nerve and defend this former resistance level.
The next potential trouble area comes in around $5200, a level which was support in the past. We will be monitoring BTC/USD prices for further developments over the coming days to figure out whether this was indeed a genuine breakout or another false hope for crypto bulls, who have witnessed many such price spikes after the bubble deflated violently at the back end of 2017 only for the selling to quickly resume again.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
My colleague Matt Weller had already written about this potential breakout.