Bitcoin just broke above a key resistance level. Here's what chart analysts say happens next

Published Tue, Oct 24 20233:11 PM EDTUpdated Tue, Oct 24 20234:15 PM EDT

At last, bitcoin has broken out of a tight trading range, potentially heralding greater highs from here. After oscillating between $25,000 and $30,000 for most of the year, touching the top end several times and stepping out of it briefly at one point in July, the flagship cryptocurrency shot up to $35,000 late Monday . Bitcoin sat just below that threshold for much of the trading day Tuesday. Investors should expect higher lows and higher highs in the bitcoin price over the next few months, chart analysts say. "The strong rise in the price of bitcoin is indicated by its daily relative strength index reaching above 80 for the first time since January," Ari Wald, a technical analyst at Oppenheimer, told CNBC. "Although typically viewed as an overbought condition, it's also an indication that price is still accelerating." "This characterizes a trend that should continue, rather than reverse, as it did in January 2023," he added. "This doesn't mean that trend will continue in a straight line higher either, but it does indicate pullbacks should provide tactical opportunities for purchase, similar to the test of the 200-day average in March 2023." Wald said he's eyeing the 200-day moving average of $28,000 as a potential new support level while bitcoin runs into key retracement levels of its 2021-22 decline. Many chart analysts considered the previous support level to be about $25,000. If bitcoin can clear the $32,000 level, that would open the door for it to reach the $38,000 to $40,000 range, according to Jonathan Krinsky, chief market technician at BTIG. For Julius de Kempenaer, senior technical analyst at StockCharts.com, bitcoin's former resistance level of roughly $31,000 could now become support, with the next resistance level ranging as high as $47,000 to $48,000. "All selling activity in the $31,000 area has now been exhausted, there is no supply left, and buyers are getting very aggressive, which is pushing the price up," de Kempenaer said. "The tables have now turned, and risk/reward is getting back in favor of bitcoin." — CNBC's Michael Bloom contributed reporting.