Bitcoin has struggled to make any price headway in the past year as all attempts to rally have ended in sell-offs. Bitcoin plunged by over 60% during the early-March liquidation panic that spared very few assets. Since then, Bitcoin has steadily recovered and is back to where it was earlier this year before the coronavirus-induced global market crash. The incredible amount of monetary stimulus provided by global central banks has undoubtedly contributed to Bitcoin’s price rebound.
Since bottoming in mid-March after hitting $4,000, Bitcoin has been rising within a channel pattern. Bitcoin is now sitting underneath the key $10,000 to $11,000 resistance zone that it has struggled to break above for much of the past year. If Bitcoin can clear this level in a convincing manner, it would be an important bullish confirmation signal.
Bitcoin daily chart
Interestingly, the weekly chart shows how a wedge pattern has been forming in Bitcoin for the past several years. Large moves often occur when assets break out of wedge patterns. Bitcoin’s $10,000 to $11,000 resistance roughly coincides with the downward-sloping resistance of the wedge pattern. If Bitcoin can break above this cluster of resistance levels, it would likely clear the path for even further gains.
Bitcoin weekly chart
For now, I am watching if Bitcoin is able to clear the major hurdles that are overhead. With global governments taking on trillions of dollars worth of new debt and central banks printing trillions of dollars worth of money with no end in sight, unprintable assets like Bitcoin, gold, and silver should benefit greatly in the years to come.
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