Bitcoin breaks out of the range and eyes a key resistance

The new week started with a bang as we saw strong moves across the board in the markets. The main theme remains the "sell America" trade, but bitcoin was a standout as it decoupled from the stock market.

Bitcoin is generally correlated with stock market performance given that they have similar macro drivers like future growth expectations. Yesterday, the S&P 500 and the Nasdaq sold off, while bitcoin rallied.

The correlation is not perfect and we saw many times bitcoin decoupling from the stock market due to idiosyncratic drivers, but I struggle to find a catalyst to justify yesterday's price action.

On the daily chart, we can see that bitcoin has now broke decisevely above the key trendline and the 90,625 resistance will be eyed as the next target. That's where we can expect the sellers to step in with a defined risk above the resistance to position for a drop back into the lows.

On the 1 hour chart, we can see the breakout of the recent range. From a risk management perspective, the buyers will have a better risk to reward setup around the broken resistance around the 86,125 level to position for the rally into the 90,625 resistance next. The sellers, on the other hand, will want to see the price falling back below the 86,125 level to target the 83,000 support next.