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What Does Technical Analysis Say About Bitcoin?

Technical analyst DonAlt sees Bitcoin's BTC/USD weekly close as a potential market structure break but warns against overanalyzing specific levels on higher timeframes.

What Happened: In the latest podcast update, DonAlt emphasized the importance of consistent methodology when interpreting crypto market structure.

"I just think the discussion is very noisy," he said regarding debates about higher highs and lows. "I really think this is not a matter of right or wrong, it’s more a matter of how you interpret these signals and do you do so consistently."

For Bitcoin, DonAlt identified the $61,000-$64,000 range as a key area to watch on the weekly timeframe. He sees a weekly close above $64,200 as necessary for bullish continuation.

Two common processes after a breakout are aggressive continuation or dip and continue, which in market structure terms translate to higher high continuation or higher high, higher low continuation.

On lower timeframes, he highlighted the weekly open around $65,500 as an important pivot, pointing out how traders can use the weekly open for both conservative and aggressive strategies.

"First of all, we know that we’re roughly in an area of weekly support. So if we have a week that’s going to be strong and/or if this is some sort of trap, eventually if the weekly is going to close green, then by definition it has to close above the weekly open," the trader outlined his thought process.

For Ethereum ETH/USD, DonAlt sees $3,000 as a key level for strength but adds that it has been weaker relative to Bitcoin lately. He remains cautious on altcoins overall, preferring Bitcoin or select alternatives for bullish positioning.

DonAlt emphasized the importance of having a consistent approach to interpreting market signals, rather than constantly switching between different timeframes, chart types or specific highs and lows

One proposed strategy is to catch the transition from bearish to bullish sentiment around the weekly open. Traders can buy below the weekly open in anticipation of a bullish move or sell above the weekly open if bearish and target the opposite side.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.