Bitcoin (BTC) Technical Analysis: Descending Channel Breakout Alert

Bitcoin (BTC) misplaced floor Monday morning, giving again a few of the positive factors posted throughout what has been a constructive month for the legacy cryptocurrency.

Bitcoin (BTC) price opened the week on a bearish note, giving back some of the gains posted throughout what has otherwise been a positive month for the legacy cryptocurrency.

Recent gains have been fueled in part by the Federal Reserve’s first interest rate cut in four years and the announcement by Chinese authorities of wide-ranging economic stimulus measures. Despite Monday’s decline, bitcoin is still up about 8% since the start of September, a month when its performance typically lags.

Below, we take a closer look at bitcoin’s price chart and use technical analysis to highlight important price levels to watch for heading into October.

Descending Channel Breakout Alert

Bitcoin’s price has oscillated within a multi-month descending channel since setting its record high in March.

More recently, after bottoming out earlier this month near the pattern’s lower trendline, the cryptocurrency’s price has staged an impressive rally to the formation’s opposing trendline, reclaiming the the closely watched 200-day moving average (MA) along the way.

Amid the potential for a breakout above the descending channel, we’ll highlight several key overhead price levels to keep in mind, while also identifying a crucial support zone to watch for during potential retracements.

Key Overhead Ranges to Watch

The first level to keep an eye on is situated around $68,500, a region just above the channel’s upper trendline where the price encountered resistance near twin peaks that formed throughout July.

A rally above this point could see the cryptocurrency’s price move up to the $72,000 level, where traders who bought at lower prices may look to lock in profits near several peaks slightly below the all-time high (ATH) that formed on the chart between March and early June.

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To project a price target above the ATH, we can use a bars pattern. To do this, we take bitcoin’s trending move higher from January to March and place it from this month’s low, which forecasts an upside target of around $97,000. We chose this prior move as it followed a pullback of around 22%, not unlike the current bullish move, which began after a 19% dip.

Important Retracement Level to Monitor

Upon a retracement from the descending channel’s upper trendline, traders should watch for the $60,600 level, an area where bitcoin’s price finds a confluence of support from the 50-day MA and a trendline connecting a series of equal trading ranges from February to September.

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As of the date of this article’s publication, the author does not own any of the above securities.