Bitcoin hits major resistance before BTC begins a 20% price spike

Bitcoin price action on Tuesday capitalized on Monday’s massive rally, extending the bullish momentum for a bullish close near 3%. However, as BTC approached $45,500, sellers stepped in and halted any further momentum.

Bitcoin price completes bullish entry that signals a renewed bullish expansion phase but still needs to crack the 50% Fibonacci retracement.

On Monday (and confirmed again on Tuesday), Bitcoin price completed what Ichimoku traders and analysts have waited for since the beginning of 2022: an Ideal Bullish Ichimoku Breakout. The rule for this entry are as follows:

1. The current close is above the Ichimoku Cloud (Senkou Span A and Senkou Span B).
2. The Tenkan-Sen is above the Kijun-Sen.
   1. If the Tenkan-Sen is below the Kijun-Sen, then the Kijun-Sen must be flat or pointing down while the Tenkan-Sen is pointing up.
3. Future Senkou Span A is above Future Senkou Span B.
4. The Chikou Span is above the bodies of the candlesticks and in open space.
   1. Open-space is a condition where price will not intercept the body of a candlestick over the next five to ten periods.

While bulls still need to confirm the breakout by pushing Bitcoin price higher, upon confirmation, the next target for BTC is near the $59,000 value area where a high volume node in the extended 2021 Volume Profile and the 161.8% Fibonacci extension exist.

BTC/USD Daily Ichimoku Kinko Hyo Chart

A pullback to retest the 2022 Volume Point Of Control and Senkou Span B at $42,700 is very likely and even desirable from a bullish standpoint. A pullback is bullish because a retest of the prior resistance turned support helps to confirm the breakout and establish a clear signal for aggressive and conservative traders that long entries are appropriate.

Downside risks have been mitigated but remain a threat. The near-term bullish outlook will be invalidated if Bitcoin price closes at or below $37,000. In that scenario, Bitcoin would confirm a massive bull trap and initiate the inverse of the current Ichimoku entry – the Ideal Bearish Ichimoku Breakout - with new lows anticipated near the $28,000 price level.