Bitcoin Price Prints Bullish Technical Pattern, Why Close Above $28.5K Is Critical

Key Takeaways:

• Bitcoin price is consolidating above the $27,200 support zone.
• BTC/USD is trading in a major contracting triangle with resistance near $28,400 on the 4-hour chart.
• The price might be a new rally if there is a clear upside break above $28,500.

Bitcoin price is consolidating below $28,500. BTC/USD seems to form a bullish breakout pattern with resistance near $28,500 and $28,700.

Bitcoin Price Holds Key Support

In the past few weeks, Bitcoin price mostly traded in a bullish zone above the $26,000 level. The BTC/USD pair broke many hurdles near $26,500 to move further into a positive region.

Finally, the bears appeared near the $28,700 and $28,800 levels. A new multi-week high was formed near $29,171 before a downside correction occurred. The price traded below the $28,000 level and tested the $27,200 support.

A low is formed near $27,213, and the price is now trading in a range. There was a move above the 50% Fib retracement level of the recent downside correction from the $29,171 high to the $27,213 low.

Bitcoin is trading above the $28,000 level and the 50 simple moving average (4 hours, blue), similar to Ethereum. On the upside, immediate resistance is near the $28,400 level. A major contracting triangle is forming with resistance near $28,400 on the 4-hour chart.

The triangle resistance coincides with the 61.8% Fib retracement level of the recent downside correction from the $29,171 high to the $27,213 low.

The main breakout zone is forming near the $28,700 level. A close above the $28,700 level might start another rally. The next major resistance might be near the $30,000 level, above which the bulls may perhaps aim a move toward the $32,000 resistance zone in the coming days.

Downside Break?

If there is no move above $28,500 and $28,700, Bitcoin price might extend its decline. On the downside, the first major support is near the $27,900 level and the triangle lower trend line.

The next key support sits near the $27,200 level. A clear move below the $27,200 support could initiate a move toward the $26,500. If the bulls fail to protect the $26,500 support, there is a risk of a drop toward the $25,000 support.

Overall, Bitcoin price seems to be setting up for a new increase above the $28,500 and $28,700 resistance levels. If BTC breaks the $28,700 resistance, it could rally again. Conversely, it may perhaps decline toward the $26,500 support.