Bitcoin, the world’s largest cryptocurrency by market cap, has traded at or near $30K per coin for the better part of 2023.
Throughout the year, an uptrend channel has formed that is currently still holding. If support remains unbroken, it could propel BTCUSD to the top of the parallel channel which is currently located at or around $42K per coin.
A Bitcoin Price Channel For Your Viewing Pleasure
2023 might not have featured the same painful drawdowns in Bitcoin and other cryptocurrencies as 2022 did, but the market is still doling out suffering in the form of boring, sideways price action, and crypto winter PTSD.
Although BTCUSD has mostly been ranging around the $30,000 level for months now, it has overall remained in an uptrend. Uptrends are defined as a series of higher highs and higher lows.
Oftentimes, these uptrends are supported by drawing a trend line below intraday troughs. Depending on the price action, occasionally a parallel channel will form, providing both support and resistance on either end, keeping an uptrend from moving upward too quickly despite the general trajectory.
Such a parallel uptrend channel has formed in Bitcoin, and if the upward-sloping support trend line continues to stay solid and intact, a move to the top of the channel is likely.
Will the channel hold or break down? | BTCUSD on TradingView.com
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The channel began to form in late 2022, acting first as an upward-sloping support line that broke down during the FTX collapse. Bitcoin price then meandered sideways until a new, parallel upward-sloping support carried it higher. With the previous support now acting as resistance, it created the upper boundary of the parallel channel that price is now ping-ponging back and forth within.
If the current uptrend structure holds this latest selloff, a push to the upper resistance boundary is possible. As time ticks by, this upper boundary will reach $42K within the next week or two. If Bitcoin does indeed make a run for the upper boundary, this price is within striking distance by early August.
On the other hand, if the channel breaks down, it could be a sign the uptrend is over and short-lived. Failure to produce a meaningful rally could tell the market that the downtrend has resumed, and new lows are ahead.