Bitcoin is closing in on key resistance level that could signal nearly 30% upside ahead, according to a technical analyst
Bitcoinjumped 3% on Friday to trade just below its key resistance level of $51,000.
- If bitcoin can decisively break above $51,000, it would signal a surge to its prior record high.
- A jump to Fairlead Strategies $65,000 price target represents potential upside of 28%.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Stockton identified $51,000 as strong resistance, derived from the 61.8% fibonacci retracement level of recent price action in the cryptocurrency. On Friday, Bitcoin jumped as much as 3% to trade at about $50,800, just $200 below the key level.
If bitcoin can stage a decisive breakout above $51,000, marked by two consecutive daily closes above the level, then Stockton sees the cryptocurrency trading to its prior high of $65,000. That represents potential upside of 28% from current levels.
"Once initial resistance is cleared, which we expect beyond the very near term, targeted resistance would become the all-time high," Stockton explained in a Monday note. Bitcoin hit a high of about $64,900 in mid-April.
The move higher in bitcoin follows a breakout in ether, which cleared its key resistance level earlier this week and now has its sights on its prior record high. While momentum has been strong for ether, it is beginning to spill over into bitcoin as well.
But if bitcoin is rejected at its $51,000 resistance level, it could slide back down to test support near $41,500, according to Stockton, representing potential downside of 18%. That support level is just below bitcoin's 50-day moving average. But Stockton doesn't view that level as likely being tested.
"Additional consolidation is likely with short-term momentum having weakened and room to shortterm oversold territory. However, we do not believe a test of initial support at the 50-day MA is imminent," Stockton concluded.
- Paytm board to consider share buyback proposal on December 13
- Sensex, Nifty50 open in the green – Paytm rises on buyback proposal, HCL Tech declines
- Rupee gains 19 paise to 82.19/$ on dollar weakness and firm equities
- Football players age faster than others, says a Harvard study
- Realme 10 Pro+ 5G Review: An all-round value smartphone