Bitcoin (BTCUSD) Surged Above $110,000 for the First Time

Bitcoin (BTCUSD) surged above $110,000 for the first time on Wednesday, surpassing its previous record set just before President Donald Trump's January inauguration.

Bitcoin (BTCUSD) price surged above $110,000 for the first time on Wednesday, extending gains from a recent low and putting the cryptocurrency on track to test the previous record high set just before President Donald Trump’s January inauguration.

The digital asset has been gathering momentum this week after the Senate on Monday voted to advance a bill that establishes a regulatory framework for stablecoins and JPMorgan Chase (JPM) CEO Jamie Dimon, a longtime crypto skeptic, said the bank’s clients would be able to buy bitcoin.

Bitcoin has also received a boost recently from executives at some publicly-listed companies, which have plowed billions of dollars of treasury funds into the cryptocurrency in a move that is likely to heat up in the months ahead as executives seek to put cash to work in a record low interest-rate environment.

For example, MicroStrategy (MSTR), which is helmed by bitcoin bull Michael Saylor, purchased an additional $765 million worth of Bitcoin last week, bringing the value of its holdings in the cryptocurrency to more than $63 billion.

These latest developments serve to further expectations that Washington is committed to developing a crypto-friendly regulatory framework and highlight the accelerating corporate acceptance of digital assets.

Bitcoin was last up more than 0.4% for the day at $110,000 at the time of writing, after hitting a high of $110,700 earlier in the evening. The digital currency has now risen about 45% from a low of around $76,000 hit in early April, when investors pulled back from risky assets amid renewed worries about global trade tensions that have since simmered down.

Below, we break down the technicals on bitcoin’s chart and identify crucial price levels that investors will likely be keeping an eye on in the days ahead.

Rising Wedge in Focus

Since bottoming out last month, bitcoin’s price has been trading higher inside a rising wedge, a chart pattern that can signal an impending trend reversal upon breakdown. What’s more, it’s worth noting that this move higher has taken place on lower trading volume, which may indicate that larger market participants are still on the sidelines.

However, more recently, the price has edged closer to the pattern’s upper trendline, a move that has coincided with the relative strength index (RSI) moving into overbought territory. In another win for BTC bulls, the 50-day moving average crossed above the 200-day MA on Wednesday to form a golden cross, a chart event that can indicate further upside ahead.

Let’s use some technical analysis to project a potential bullish price target above bitcoin’s record high and also identify three crucial price levels of support that could be monitored during any future retracements in the cryptocurrency.

Chart-Based Bullish Price Target

Investors can use the bars pattern tool to project a price target above bitcoin’s record high. For this analysis, we will be applying this technique by taking the cryptocurrency’s trend from late April to early May and then repositioning it from Sunday’s low. This analysis projects a target of about $120,000.

We select this prior trend as it commenced following a period of narrow consolidation, similar to how the current move higher began.

Crucial Price Levels of Support

The first lower level to watch on bitcoin’s chart is around $107,000. Traders will be following if the two prominent peaks that formed on the chart in December and January, which is now a crucial zone of resistance, can flip into support.

Should the bulls be unable to defend this key level, we could see the price pull back to the psychological $100,000 mark. This area would provide support close to a horizontal line that connects a series of trading activity on the chart stretching back to last November.

Finally, a more significant drop from here could see bitcoin’s price testing lower support around $92,000. Traders may seek entry points in this area near the two moving averages, which closely align with a range of peaks and troughs that developed on the chart between November and March.

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