₿itcoin Breaks Out, The Bulls Are Back in Town

Just as we spoke about yesterday BTC was caught in a compression triangle all week very visible on a four hour candlestick chart and was poised to break out today are initial target was $8,000 - $8,200 but as you can see there were a number of key price points that were holding BTC back since its most recent fall such as the pennant formation highlighted in our first chart. The fact that the top of this flat top ascending bottom wedge had the top line coinciding with the .618% Fibonacci retracement gave us much more energy released to the upside when it broke out of this long term formation as well as the compression triangle in the same day. Breaking through these resistance levels that were in play since the beginning of March, tells me that at least in BTC for now the bulls are back in town.

At the approximately 10:00 PM EST we had the break out we had been calling for when we broke out of the second compression triangle in two weeks both times showing us similar three green candles after the breakout at the time BTC was only up 3% but that was just the beginning as each four hour candle would grow in size until BTC futures hit $8,900. Anyone following our articles would know that we had been calling for $8,000 by this weeks end for the past two weeks, but even I was surprised that it broke out of the larger wedge that had been defining the action of the last two months.

Although I am supremely pleased to see BTC trading up over 15% on the day as of 5:00 PM EST I would have loved to see a BTC rally without any rally in U.S. equities. In these last few months we have seen just how much of Bitcoins price is tied at least to the sentiment in equites but will typically move either up or down at a greater percentage than say the S&P 500.

Now we are in the midst of a bull run seemingly destined to reclaim pre-crash prices after BTC was rejected at the 78% retracement ($9,249) on March 6th.  This was really a culmination of so many indicators, averages and technical trading tools along with the rally in U.S. equities. If we continue to see equities rise we will see BTC hit $10,000 by the end of May. Tomorrow we will go over all the indicators that signaled this bullish breakout was likely prior to last night.