Bitcoin is currently sitting at ~$7175 which happens to be an extremely important trendline support. This trendline that price is sitting on has been respected and resulted in bullish reversals since ~November 10th, 2015.
Only one time had price temporarily come under this zone, resulting in a bearish fakeout where price reversed and quickly came back above the support.
We can see where that “fake out” had occured. Price had made a curved pattern and continued to move upwards consistently as we broke back above the trend line resistance.
This leads us to believe that this trendline is a very powerful support but it can also be broken temporarily to make a similar movement. A break under this support would not change our long term bullish bias on Bitcoin.
These two scenarios, even with a break of the trendline support show that we believe that we will be heading into a long term bullish cycle at some point in the near future.
It is possible that we could test the area of $3100-3200 to create a double bottom if these support areas don’t hold but I find that to be very unlikely.
It is also extremely important to pay attention to the descending channel that bitcoins price is currently inside of. A break the upper side will be a very bullish sign.
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