Bitcoin has been trading in an increasingly narrow range for more than a week before the recent breakout that has been attributed to the news of Square's investment. It went from around $ 10,500 on day 8 to a high of $ 11,692 on October 12. Despite the breakout, the asset has failed to recover $ 12,000, which has turned into a strong resistance level.
However, an analyst and trader, Crypto Michael says that breaking this level and turning it into support will make it possible for Bitcoin to reach $ 17,000 in 2020. In a post he wrote on Cointelegraph, he said that traders and investors only need to see the $ 12,000 for Zone resistance at $ 12,400, a breakout of which will confirm that another wave of momentum is on the way.
“The daily chart for Bitcoin shows a clear upward movement towards upper range resistance. The critical factor to consider is if the resistance zone of $ 12,000 to $ 12,400 breaks, as that would imply that there is another wave of momentum on the horizon ", wrote.
This breakout that he sustained is not likely to happen any time soon because the price of Bitcoin is moving towards the level very quickly instead of gaining momentum on a slow but steady rise.
Bitcoin's narrow range is a possible bull market precursor
Bitcoin has been range bound for weeks and even after a much-needed bullish move, it is still range bound, only at a higher price level. While traders and investors find this boring and uneventful, Crypto Michael says that it may be signaling the beginning of a major bull market as it is similar to the situation in 2016 before the 2017 bull market.
If this is the case, key resistances will turn into support, as was the case with the $ 11,100 resistance zone, which turned into support following Square's announcement. Price movements within a range are considered phases of consolidation or momentum accumulation that will eventually give the price enough strength to break through resistance.
Therefore, Bitcoin can be some time between $ 11,000 and $ 11,500 with a possible retest of lower levels to eventually hit $ 12,000 to support as it is not possible to break it all at once.