Bitcoin Forms Rising Wedge Pattern: Whats Next For The Cryptocurrency?
- Bitcoin forms a Rising Wedge pattern, signaling potential consolidation or reversal after strong gains.
- Key levels at $85,000 and $100,000 are crucial for determining Bitcoins next move in the short term.
- ETF inflows and the potential U.S. Bitcoin Reserve Act could significantly boost Bitcoins long-term prospects.
Bitcoin is forming a Rising Wedge pattern, cryptocurrency which has seen tremendous growth recently, is now in a consolidation phase where price action is building an upward sloping support and resistance. The Rising Wedge pattern is one of the most important and are used to signal potential reversal after a long bullish trend.
Source: Chart by CryptoRover
In a recent YouTube video, Rover pointed out that although Rising Wedge patterns are considered bearish, the pattern does not always lead to a bearish market. Actually, there are cases where this pattern, has produced OBV line that broke the bullish. However, due to recent sharp increase in the price of cryptocurrency, this pattern indicates a period of stagnation. After BTC reached a new all-time high, it faced rejection and the price dropped down. This price action further strengthens the thesis that a consolidation phase is the next step before the next major breakout. As of writing BTC is trading at $93,085, up by 1.35% over the past day.
Bitcoins Price Decision Point
On the 12-hour chart, we can see that Bitcoin is trading within the ascending triangle, which means that the coin remains uncertain. From the pattern above, the price of BTC is likely to either rise or fall through support and resistance levels. As it stands right now, if the price of BTC is able to break through the level of resistance, then this may mean that there is even more upside left in the price, but if the price falls under the level of support then it could be indicating that a short term dip may be coming.
Should the price break lower, the $85 000 level is of critical significance in this case as it may provide a good entry point for longs given a possibility of a bounce higher. On the other hand, if BTC is able to close a daily candle above the current price level, the door could be opened for an aggressive move, with the next levels of resistance at $100,000. This could lead to further price appreciation and possibly place the token on the path to a new record high as even more investors get into the instrument.
Source: Chart by CryptoRover
Bullish Divergence and Trends
Bullish divergence is also possible, especially if Bitcoin manages to break above its current resistance without much strength. This could break the bullish trend as the upsurge will not have the force it has had in other instances. However, the long term perspective for Bitcoin is still positive, with expectations that cryptocurrency will see massive appreciation during this market cycle.
New inflows into Bitcoin ETFs and the possibility of the U.S. Bitcoin Reserve Act also support the future growth of cryptocurrency. As more institutions are willing to invest in it, the future of BTC seems bright even with short term fluctuations.
Read more: https://www.tronweekly.com/bitcoin-forms-rising-wedge-pattern-whats-next/
Text source: TronWeekly
