10K remains key resistance for BTC with 9.1K important trading support

Similar to other risk assets, such as the S&P 500, BTC has traded in a relatively narrow range under resistance through May. A breakout in either direction from the recent trading range is likely to signal BTC’s next tactical  directional shift. 10k followed by 10.5k remain the levels traders are fixated on but 9.1K also remains an equally important trading level to be aware of.

Our bias is for an upside breakout to develop given BTC’s short-term (15-dma), intermediate-term (50-dma) and longer-term (200-week sma) trends remain positive. In addition, the advance-decline line for the FS CryptoFX 10 large-cap index is in a confirmed uptrend defined by a series of higher high and higher lows. BTC is also trending positively to the S&P 500 recently establishing 7-month relative high and it is challenging its 2018-2020 relative performance downtrends to gold and the TLT bond ETF. An upside rally above 10-10.5K resistance would likely be accompanied by an upside trend reversal to gold and the TLT confirming a new bullish uptrend to both. However, we also fully appreciate the risk of prejudging any technical pattern before it has resolved, a lesson we have learned once too often over the past 28 year of doing technical research. In fact, 9.1K, just below BTC’s rising 15-dma at 9.4K, is the level we would recommend higher frequency traders use as a stop loss level. Why? A break below 9.1K would signal a lower near-term low and a reversal of the March-May uptrend. Next support is at 8K near BTC’s 50- and 200-dma’s.

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