Watch these Bitcoin price levels as the cryptocurrency rises above $100,000

Bitcoin (BTCUSD) rose above $100,000 for the first time late Wednesday as investors bet that the new Trump administration and Congress will support measures that benefit the cryptocurrency market.

Wednesday’s rally followed news that President-elect Donald Trump had appointed crypto enthusiast Paul Atkins to head the Securities and Exchange Commission (SEC). Atkins would replace crypto critic Garry Gensler, who announced he would step down in January.

Bitcoin recently traded at $103,000, up from around $95,000 before the SEC nomination announcement. Since the election, Bitcoin has surged more than 45% as investors have pushed up the digital asset on expectations of more crypto-friendly policies.

Below we take a closer look at the technical data on the Bitcoin chart and point out key price levels to watch out for.

Breakout of the pennant pattern

As it surges above $100,000, Bitcoin has broken out above a newly formed pennant, a chart pattern that signals a continuation of the legacy cryptocurrency’s current uptrend.

It is also worth noting that at the end of October, the 50-day moving average (MA) crossed above the 200-day MA and formed a golden cross, a bullish signal underpinning the cryptocurrency’s strong uptrend.

While the Relative Strength Index (RSI) confirms bullish price momentum with a reading above 70, the indicator also shows overbought levels, increasing the likelihood of short-term profit-taking.

Let us now use technical analysis to project a bullish upside price target as Bitcoin moves into price discovery, and also identify several key support levels to monitor during declines.

Measured: Move the bullish target to watch

As Bitcoin moves toward price discovery, investors can use a measured move, also called the measurement principle, to forecast a potential price target.

This technique calculates the impulsive upward move before the pennant and adds that amount to the upper trendline of the pattern. In this case, we add $32,430 to $97,500, predicting a bullish target of $129,930.

Important support levels to monitor

A wave of profit-taking could see Bitcoin’s price fall to around $90,500, a position on the chart that could find support near the low of the pennant pattern and begin a period of short consolidation in mid-November.

Selling below this level could bring the $80,500 region into play. This area, currently just below the upward-sloping 50-day MA, could attract buying interest near the close and open levels of two bullish candlesticks last week.

Finally, a more bearish decline could lead to a retest of key support around $70,000, an area where investors would likely look for entry points near the upper trendline of the previous trading range. This location could also find support from the 200-day MA as the closely watched indicator continues to rise.

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At the time of writing, the author does not own any of the securities mentioned above.

CORRECTION: This article has been updated with the correct day Bitcoin rose above $100,000.