Bitcoin Breaks Bear's Hopes, Busts Through Resistance: What's Next?

Bitcoin BTC/USD broke up from a bull flag on Aug. 4 and has continued to climb. On Monday the apex cryptocurrency broke through heavy resistance and surpassed $45,000.

On Sunday, the U.S. Senate continued to debate the cryptocurrency regulations in the infrastructure bill now expected to get a final vote on Tuesday before heading to the House of Representatives.

This weekend, Senators Mark Warner and Rob Portman revised their amendment and in it attempted to "pick-and-choose" which cryptos could survive or fail by requiring "proof of stake" crypto miners to report to the IRS while exempting "proof of work" miners from doing so. The amendment received wide condemnation from the crypto community and both Coinbase Global Inc COIN CEO Brian Armstrong and Tesla Inc TSLA CEO Elon Musk took to Twitter voice their concern.

Bitcoin hasn't reacted negatively to the news, however, and continues to push higher into a price range it hasn’t traded in since May.

See Also: How to Buy Bitcoin

The Bitcoin Chart: On Monday morning, Bitcoin surpassed Sunday’s high-of-day after testing support of the daily eight-day exponential moving average (EMA). The crypto has risen about 23% since breaking out of the daily bull flag pattern but, with the measured move of the pattern being roughly 43%, Bitcoin could skyrocket further north over the coming days.

Bitcoin has a price history support/resistance at $44,850 and the 200-day simple moving average (SMA) has aligned with it. On Saturday and Sunday, the cryptocurrency struggled at the levels but was able to pop up above it on Monday. Bulls will want Bitcoin to close the day over the 200-day SMA so that overall sentiment in the crypto is considered bullish.

Bitcoin is trading above the eight-day and 21-day EMAs with the eight-day trending above the 21-day, both of which are bullish indicators. Bitcoin’s relative strength index (RSI) is slightly high at about 71% and sideways consolidation is needed to lower Bitcoin down from the overbought territory.

• Bulls want to see Bitcoin consolidate on lower timeframes to cool the RSI down below 70% and then for big bullish volume to come in and push the crypto up toward a higher resistance level at $48,817. If Bitcoin was able to reclaim the level as support, it could trade up toward the $51.191 level.
• Bears want to see big bearish volume come in and drop Bitcoin bac down below the support of the 200-day SMA and the $44,850 support level. If Bitcoin were to lose the levels as support, it could fall down toward $42,233.