Bitcoin price levels to watch after cryptocurrency hits first record high since may

Bitcoin's Record High: What Technicals Tell Us About Potential Next Moves

Bitcoin recently powered past the $112,000 mark, hitting a new record high for the first time since late May before consolidating. This impressive move comes on the heels of increased adoption by corporations adding BTC to their treasuries and progress in pro-crypto legislation. Bitcoin's year-to-date gains, sitting around 19%, are notably keeping pace with tech giants like Nvidia and Microsoft over the same period.

Key Takeaways from the Chart:

• Bitcoin surged past $112,000 to a new record high, consolidating shortly after.
• The price broke above the top trendline of a descending channel, signaling potential for further upward movement.
• A technical projection using the measuring principle suggests an upside target of $146,400.
• Crucial support levels to monitor are around $107,000 and $100,000.

Understanding the Descending Channel Breakout

Wednesday's price action saw Bitcoin decisively push above the upper trendline of a descending channel pattern. This technical development is significant as it often precedes a continuation of the previous trend, which in this case was upward before the channel formed. The Relative Strength Index (RSI), a momentum indicator, supports this bullish outlook; it remains below overbought levels, suggesting there's ample room for the price to climb further into "price discovery" mode.

Interestingly, while the price climbed, trading volume on major U.S. exchanges like Coinbase has been relatively low. This could imply that larger market players, particularly institutional investors, might be accumulating Bitcoin more through spot Bitcoin ETFs than directly on exchanges, potentially masking the full extent of buying pressure.

Projecting the Upside: The Measuring Principle

For investors looking for potential future price targets, technical analysis offers tools like the measuring principle. This technique involves taking the height of the price movement leading into a pattern (like the descending channel) and projecting that distance from the point where the price breaks out of the pattern.

Applying this principle to Bitcoin's chart, we measure the uptrend that occurred before the descending channel formed. Adding this distance to the approximate breakout point around $108,800 yields a projected upside target of $146,400. This suggests a potential gain of approximately 32% from current trading levels if the technical pattern plays out as expected.

Identifying Critical Support Levels

While the focus is on potential upside, smart investing involves understanding where the price might find support during any potential retracements. For Bitcoin, two major levels stand out on the chart.

The first level to watch is around $107,000. This price point is strategically located just below the upper trendline of the recently broken descending channel. It also aligns closely with the 50-day moving average and previous price peaks from December and January, making it a confluence of potential support factors. A successful defense of this level would reinforce the bullish breakout.

If the price fails to hold at $107,000, the next critical support area is near the psychological level of $100,000. This round number also corresponds roughly with the lower trendline of the descending channel and a significant amount of trading activity observed since November. This region could represent a key area where bulls might step in to buy, offering potential entry points for investors who missed the initial move or are looking to add to their positions on a dip.

Putting It Into Practice

Understanding these technical levels provides investors with actionable insights. The breakout from the descending channel suggests bullish momentum. The measuring principle gives a potential upside target to consider for profit-taking or setting expectations. Crucially, monitoring the $107,000 and $100,000 support levels helps manage risk and identify potential buying opportunities if the price pulls back. While technical analysis is a valuable tool, it's important to remember that markets can be volatile, and other factors can influence price movements.