Bull flag breakout will decide whether Bitcoin price goes to $16K or $14K

Published at: Nov. 6, 2020

Bitcoin price (BTC) appears to be taking a short breather after reaching a new 2020 high at $15,960 on Nov. 5.

The 1-hour and 4-hour timeframe show the price compressing within a flag and throughout the majority of the trading day, the $15,500 level has held as support. $15,750 is the level Bitcoin needs to break in order to pursue another stab at $16,000. 

Within the last hour, a dragonfly doji candle formed as the price swept low to test the lower support of the bull flag at $15,166, and as the formation approaches its terminus traders will look for a breakout which will push through the $15,500 to $15,600 level where a high volume VPVR node lurks.

Clearly, there is a small tussle taking place between bulls and bears, and flipping the $15,600 level to support with a 4-hour close will increase the possibility that BTC will make a third run at the $16,000 mark.

The RSI also continues to rise above 70, a bullish signal, but daily purchasing volume has tapered off a bit after some traders secured profits as BTC surged to $15,900.

Alternatively, a drop below the flag support at $15,100 opens the door for a touch of the 20-MA at $14,680. The swift, nearly vertical breakout that occurred from Nov 4 - 5 occurred without establishing any ‘new supports’, and as the volume profile, visible range shows there is a gap extending from $13,900 to $15,500.

In the event that the price falls below $15,100 and buyers don’t perceive this as a dip-buying opportunity, there is the possibility of a retest of the $14,000 to $13,800 level as support.

While a 9%, $1,400 drop is un-nerving, lower support retests are perfectly natural and healthy after strong rallies like the one seen this week.

Altcoins finally find their way

As Bitcoin price searches for direction, altcoins have regained a smidgen of the vast territory lost over the past two months. Ether (ETH) is the most notable leader of the past few days as the altcoin rallied to $447 and is currently attempting to break through resistance at $450.

Yearn Finance (YFI) also made a strong move as it rallied more than 30% to $11,100. Uniswap’s UNI token also made waves at it added 15.5% and currently trades at $2.53.

According to CoinMarketCap, the overall cryptocurrency market cap now stands at $444.6 billion and Bitcoin’s dominance rate is 64.7%.

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