$17K Bitcoin price a real possibility if bulls flip $12K to support
Bitcoin (BTC) price had been acting inside a narrow range for the last few weeks but the momentum and trend shifted as a bullish breakout occurred on the announcement that Square had allocated 1% of its cash reserves to BTC.
This bullish breakout even caused the price to rally from $10,600 to $11,500, which is almost $1,000 in a few days.
Despite this strong upside move, traders are still cautious as they are unsure whether the bullish momentum is back or if this is just a temporary blip.
The daily chart of Bitcoin is showing a clear upward move toward the upper range resistance. The critical factor to watch is whether the $12,000-$12,400 resistance zone breaks as that would imply another impulse wave is on the horizon.
While most investors were expecting further movement to the downside, the complete opposite happened. In the past week several negative news items surfaced but none of these impacted the price of Bitcoin.
However, what did move the market was the announcement of a $50 million allocation from Square. Shortly after the news, the triangle broke out to the upside and rallied right through the $11,100 resistance zone.
This led to a strong bullish reaction across the crypto markets. A more decisive move to watch for would be a clear breakout of the current range-bound structure and this would occur if the price can push above $12,000.
Such a breakout seems unlikely to occur in the short term as Bitcoin’s price is approaching the resistance zone in one go.
Range-bound constructions are likely at the beginning of a bull cycle
The current movements can be compared with the start of the previous bull cycle at the beginning of 2016.
As the chart shows, the previous resistance zone at $10,000 was tested for confirmation, and this is exactly what occurred.
This confirmation led towards a bounce, just as the previous days have shown. The critical level to break for further bullish momentum is the $12,000 resistance zone.
However, as the current construction is similar to the movements in 2016, a breakout could take a while to occur.
In such a way, if the breakout above $12,000 happens, a bullish move towards $17,000 is very much on the horizon. The area around $17,000 is the next central pivot, and final hurdle before new all-time highs can occur.
The upper green zone between $10,600 and $10,850 is crucial to hold. If this level holds and the scenario continues to develop from here, the bull market is still on fire.
As discussed previously, a breakout above $12,000 would mean a big impulse wave to the upside and the potential continuation towards a new all-time high.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.