BTC Nears Critical Breakout Zone, Will the 200-Day SMA Trigger the Next Surge?

• BTC eyes breakout as it nears the wedge’s top; SMA200 support strengthens the bullish case. Watch for a decisive daily close.
• Strong buyer defense at the wedge’s lower boundary signals demand, while repeated rejections at resistance cap upward momentum.
• Breakout potential rises as BTC tests key trendlines. A confirmed move above SMA200 could fuel strong upside continuation.

Bitcoin (BTC) is having a bullish breakout as it tests a critical technical level, says analyst Moustache. Currently trading at $84,682.30, BTC is closing in on the high of a declining broadening wedge. The pattern, defined by converging downward-sloping trendlines, marks an era of market consolidation. 

SMA200 Acts as Crucial Support

The SMA200, represented in blue, has historically provided strong support. BTC’s recent price action suggests a positive reaction around this level. Recent candlesticks show a bounce from the wedge’s lower boundary, indicating increased buying interest. 

The long wicks on these candles highlight a strong rejection of lower prices by buyers. This behavior strengthens the lower boundary as a robust support zone. Conversely, the upper boundary has acted as resistance, capping BTC’s upward movements.

The ongoing struggle to penetrate the top trendline could be a sign of improvement. Penetrating the SMA200 on a daily close would enhance bullish sentiment and could trigger a strong price gain.

Potential Breakout Scenario

If BTC breaks above the upper wedge boundary, the price may target higher resistance levels. The projected scenario suggests a breakout followed by a minor retest. This retest would validate the breakout, converting resistance into support. Consequently, a sustained upward continuation is anticipated. However, until this breakout is confirmed, price action remains confined within the wedge.

Moreover, the price has repeatedly tested both the lower and upper boundaries. Each test of the lower boundary has reinforced it as a solid support zone. Similarly, multiple rejections from the upper trendline confirm its role as a resistance level.

Additionally, the 200 SMA adds weight to the bullish argument. Historically, a sustained move above this average signals strengthening bullish momentum. Hence, a decisive break and close above the SMA200 would mark a critical turning point.