Bitcoin Surges 9% to $109,000, Breaking Multi-Month Downward Channel

Bitcoin has recently surged past $109,000, marking a significant breakout from a multi-month downward price channel. This movement has caught the attention of traders who are now closely monitoring the next key resistance level near $112,000. The current price action resembles patterns seen in late 2020, which preceded a substantial rally. The logical breakout point is identified near $100,000, with the current structure indicating either a potential acceleration or rejection.

The chart analysis reveals a rounded bottom pattern that formed between March and September, mirroring price behavior from late 2020. This earlier structure led to a steep upward breakout, followed by consolidation and a continued rally through early 2021. The price behavior during this period mirrored a strong accumulation base, confirmed by tightening support levels. A yellow arc marks the initial accumulation curve that formed from May to August, serving as the launchpad for the next leg of the rally. Support held consistently at key trendlines, building pressure against a descending resistance that has now been invalidated. After multiple tests, Bitcoin finally broke above this neckline in mid-October.

The early signs of a broader uptrend became visible as the Relative Strength Index (RSI) trended higher, peaking during price breakouts. A similar pattern has developed in the current cycle, with rounded bottom support aligning with mid-range trendlines and rising RSI levels. Traders may view this as a continuation pattern, especially with the price structure respecting the green ascending base trend.

Bitcoin's recent exit from a downward-sloping channel confirms renewed bullish momentum, with the next visible resistance target marked near $112,000. A green arrow above the upper trendline projects further gains if resistance fails to hold. The previous touchpoints of this channel show consistent rejection until the breakout. A similar setup occurred in mid-2023, which led to a swift $20,000 upward movement. Now that the price has cleared the top range, the market is closely watching the sustainability of this breakout.

Volume and RSI both show divergence. RSI shows a slight bearish divergence at the top despite the price rising, suggesting weakening momentum. This development may limit upside temporarily or result in a retest of previous resistance zones near $104,000. The horizontal projection labeled “100K” remains a psychological level that could influence both buyer and seller behavior. Any clean move above it may lead to stronger breakout confirmation, especially with the current market structure forming an ascending wedge.

As the price moves out of the channel, one question emerges: will Bitcoin confirm a breakout or pause at major resistance? The chart’s orange resistance line has historically capped price near $112,000. A break above it could signal the start of a stronger rally phase. RSI divergence, however, poses a cautionary note as momentum appears to weaken slightly. Green trendlines from 2023 have remained unbroken throughout multiple correction periods. This consistent base support gives the breakout further validation if the price holds above $108,000. The repeated bounce off these levels supports the thesis of an early breakout cycle.

A rising pattern and rounded cup structure suggest potential continuation. Historical context from late 2020 adds to this scenario. If the $100,000 level breaks cleanly, momentum could take Bitcoin toward its next structural resistance without major rejection.