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Bitcoin Produces A Bullish Breakout As Expected- What's Next?

April 19, 2013 ( - As anticipated, Bitcoin managed to break higher above the $100 resistance area and gained further bullish momentum against the US dollar with a move to an intraday high of $136.43.

In our Bitcoin analysis and outlook throughout the week, we suggested that the top of the established $50 to $100 range should be closely monitored for a potential bullish breakout in upcoming trading sessions.

Yesterday, we also brought to our readers' attention the development of an ascending triangle pattern.

We noted that Bitcoin's highs in the last few trading sessions were identical, meeting resistance in the vicinity of the $100 level. On the other hand, the lows have been consistently pushing higher since Bitcoin found support at $50 earlier this week.

In our outlook yesterday, we explained that this pattern of identical highs and higher lows is knows as "ascending triangle"- a trend continuation pattern which we saw as an early signal of an impending breakout.

As expected, Bitcoin's bullish breakout has now materialized. The virtual currency reached as high as $136.43 today, a level within our initial target area between $120 and $140.

It is important to note that Bitoin reached an intraday low at $95, testing the previous $100 resistance area which can now begin to play the key role of a significant support area.

At this time, Bitcoin's price remains above $100, currently trading at $119.49 on Mt. Gox- the world's largest Bitcoin exchange.

Should Bitcoin continue to form a base above $100 in the days ahead, we could see the virtual currency maintaining its bullish momentum, leading to a move to our next target of $160- the approximate 50% retracement of the recent drop from $266 to $50.