This week Bitcoin broke out of the descending triangle that had defined its price action since the end of May. The top of the upper resistance trendline of this formation was tested on three separate occasions on the first week of June, in mid-August, and in mid-September. In each of these attempts at testing the upper resistance, the bearish faction showed its teeth.
Yesterday Bitcoin entered a well-received rally that took the world’s first digital currency back above $20,000 for the first time since mid-September when it briefly moved above $20,000 helped along from hype surrounding the Ethereum merge.
Bitcoin’s volatility continues to fall as the price holds in the $19,000 range. After gapping down from just above 80 in July to around 25 in August the Bitcoin Historical Volatility Index (BITMEX), volatility continues to decline breaking below 20 last week. Today the volatility index hit its lowest point in over a year at 18.83.
In trading last night overseas, Bitcoin broke out above its descending triangle for the first time since June. BTC traded over its resistance trendline at around 11 PM ET, the same hour hitting the high for the week at $19,954. BTC held above the upper resistance trend line for almost 6 hours before moving back into the descending triangle.
In our last article, we discussed the flat bottom descending top in BTC, which defined resistance since the beginning of June. We noted that this upper resistance line was tested five times giving us an indication that this resistance has tracked the highs over the last five months. Today we have yet to witness BTC break out of this wedge pattern as we get closer to the ever-narrowing apex.
