Bitcoin offers opportunity to profit as it retraces before the breakout

  • Bitcoin runs another leg higher after breaking $50,000.
  • Price action was stuck in a distribution phase since August 20.
  • The technical launch on September 5 should spell out more upside to come.

Bitcoin price (BTC) is on the verge of breaking higher and might have a stab at the monthly R1 resistance level at $52,759.59. This comes after Bitcoin was in a distribution phase between $47,065 to the downside and $50,019 to the upside. In between these barriers, buyers and sellers were able to hand over price action toward each other. Buyers picked up BTC each time on August 26, 27, 31 and September 1.

Buyers were smart enough to defend this level from sellers pushing further to the downside and, in the meantime, sit and wait on their positions before the upside presented itself. This caused a momentum build-up and sent prices beyond $50,000 on September 2. 

Looking closer at the daily price range, Bitcoin shows that sellers were not too keen to get stopped out of their short positions each time a price varied above $50,000 or tested $48,742. Only after three days, sellers forfeited, and buyers finally gained full control of the price action again. 

Bitcoin will unlock more gains

The next and first port of profit-taking for Bitcoin will be the monthly R1 resistance level at $ 52,759. Expect some short-term profit-taking, but mostly the rally should stay intact. The next and most crucial level is the test of that purple ascending trend line. That line holds some historical importance, as Bitcoin has shown since July 20.

Sellers, of course, will have that ascending trend line on their bulletin board as well and will try to take over from buyers yet again.  Expect price action to get choppy around those areas near $54,000.

BTC/USD daily chart
BTC/USD daily chart

In the best scenario where buyers stay in control, expect a break to the upside and a quick run toward the monthly R2 resistance level near $58,000 or roughly 12% gains.

If sellers can defend a break of the ascending purple trend line, a quick dip back toward $50,019 will be the first move sellers will make to book some quick profit. The risk could be that Bitcoin falls back into the range between $50,020 and $47,065.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

AVAX price edges closer to 40% breakout as Avalanche allocates $3 million to Stake DAO

AVAX price is teetering below the upper trend line of a parallel channel, hinting at a breakout. A decisive close above $61.09 will confirm the start of an uptrend to $75.32. Avalanche Foundation is allocating $3 million as incentives across all Stake DAO Avalanche strategies.

More Avax news

Bitcoin investment inflows soar as analysts predict another BTC ETF launch later this week

The first Bitcoin ETF is ready for its debut on the NYSE on October 19, marking a significant milestone in the crypto industry. A Bloomberg analyst suggests that another Bitcoin ETF could begin trading later this week ...

More Bitcoin news

Litecoin Price Prediction: LTC on the cusp of 26% breakout

Litecoin price is on the penultimate leg of a technical formation that will catalyze a quick bull rally. LTC needs to clear one critical hurdle to kick-start a run-up to levels last seen more than a month ago. A breakdown of $165.28 will create a lower low, invalidating the bullish thesis.

More Litecoin news

US Treasury highlights crypto as threat that could harm efficacy of sanctions

The US Treasury Department has issued a review of sanctions for 2021, expressing some concerns that could undermine its strength and trust. ryptocurrencies were viewed as a threat as its adoption continually increases. The department stressed the need for better communication and ...

More Shiba Inu news


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast