Bitcoin Breaks Out
It was a rough Q4 for Bitcoin and this is perhaps a surprise given both how the cryptocurrency came into the quarter combined with the bullish backdrop that had largely held since the Presidential election a year earlier. There’s also the link to gold, which has seen multiple episodes of prolonged rallies hitting deep overbought levels - and when gold prices did begin to digest, strength showed in Bitcoin as a type of replacement for an anti-fiat vehicle.
On a bigger picture basis, this is what showed up in the summer of 2020, just after Gold hit its first ever test of the $2k level. Gold rallied aggressively into that print, but it was shortly after that prices began to congest and then that big figure held resistance for the next three-and-a-half years. At the time of the first test there in Gold, BTC/USD was struggling to get back over the $12k marker; but it was as Gold ranged through the rest of 2020 and 2021 that Bitcoin broke out in a very big way, eventually hitting the $69k level.
On a more recent basis, the Gold rally took on form in early-2024 trade, shortly after a comment from Chicago Fed President, Austan Goolsbee. After holding resistance at that $2k level for three-plus years, Gold prices went vertical, and just continued to rally until an approximate 40% run into late-October. This was just about a week before the US Presidential election, and at the time Gold was very overbought, which led to profit taking as a symmetrical triangle built.
Again, Bitcoin broke out in a big way, and this is what led to the first test above the $100k marker.
Similar episodes developed from April of last year through August, and as Gold consolidated into another bull pennant formation, Bitcoin broke out, and this time, hit the 125k level, which is what led to that ominous backdrop as we began last quarter.
Bitcoin Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview
Silver Takes Over
While anti-fiat flows drove historic rallies in Gold through 2024 and 2025, initially it was Bitcoin that got the attention. But matters began to shift last year when it was Silver that that started to take over, punctuated by a strong push into the end of 2025.
But since the start of this year there’s been indication of Bitcoin coming back to life as price built and then broke an ascending triangle formation, which is often approached with aim of bullish breakout. And now that buyers are pushing higher-highs with a break of the 95k level, the 100k handle is back in view as a major decision point for the trend.
Bitcoin Daily Chart
Chart prepared by James Stanley; data derived from Tradingview
Bitcoin Strategy
Fresh breakouts are difficult to chase, especially when there’s a price like 100k in the equation. As we get closer to the psychological level, especially considering the rough Q4 outing, there could be a propensity for longs to look to take profit which could lead to a stall before the price even comes into play. And if it does come into play, that first re-test over the 100k level could similarly motivate longs to take profit which could further restrain topside rallies.
Support structure, however, will give buyers opportunity to show how motivated they are to retain control of the trend, and given the horizontal resistance that had built with the ascending triangle, there’s a very clear spot where prior resistance could come in as fresh support. I’m tracking this from 92,929 up to 93,961. Perhaps even more attractive would be if buyers don’t even allow that prior resistance to come into play, instead, showing support at the 95k psychological level.
And because this is a market that we’re dealing with, we have to expect imperfection, so even if we do get a dip below prior resistance, it doesn’t necessarily mean that buyers are done for, as any show of higher-low support above the prior point of support, taken from around the 90k level, could be construed as bullish trend continuation potential.
BTC/USD Four-Hour Chart
Chart prepared by James Stanley; data derived from Tradingview
--- written by James Stanley, Senior Market Analyst, Global Macro
