Bitcoin Breaks Out of Channel, Set to Test $113.5K
Bitcoin has broken out of a descending channel on the 4-hour chart, with volume confirming a potential trend reversal. A 4-hour candle closed above the channel. Bulls target the next resistance at $110,600, but risk a rejection and a retest of the channel. A confirmed breakout could push Bitcoin toward $113,500 and ultimately $119,000 if $112,000 flips to support. On the daily chart, the 0.618 Fibonacci level near $110,000 and a Stochastic RSI bottom band suggest strong support and upside potential. A pullback may offer a retest of channel resistance turned support. Weekly data shows Bitcoin holding a key support at $108,000, with Stochastic RSI poised for an upward turn. Despite a bearish MACD cross, price strength could lead to momentum shifts. Traders should watch for multiple daily closes above the channel and correlation with bullish US equities as catalysts for further gains.
Bullish
Bitcoin’s breakout from a well-defined descending channel, supported by rising volume, signals a shift in market sentiment toward bullish momentum. Historically, successful breakouts on the 4-hour and daily charts have led to significant price rallies, as seen in previous August and July moves. The alignment of Fibonacci support near $110,000 and oversold Stochastic RSI levels on daily and weekly timeframes suggests limited downside and potential for a swift upside move. A close above key resistances at $110.6K and $113.5K could trigger short-covering and fresh long entries, pushing Bitcoin toward $119K. However, traders should monitor for possible retests of the broken trendline and correlation with bullish equity markets as confirmation. Overall, the setup and indicators favor a bullish outlook in both the short term and potentially longer term if support levels hold.