In the middle of a two-week consolidation, Bitcoin price has bounced back twice from the local support of $26,000, creating a psychological base for traders. The daily chart indicates a double-bottom pattern formation, which is known for accumulating buying pressure at lower support levels and triggering a bullish reversal. This pattern could potentially aid Bitcoin in escaping its current volatile phase.
The daily time frame chart showcases a formation of a bullish reversal candle, morning star, at the $26,000 support level. This reversal may contribute to the development of the double-bottom pattern and push the prices towards the immediate resistance of $27,500. A breakout above the neckline resistance is crucial for completing the chart pattern, as it demonstrates the buying momentum in Bitcoin. If the daily candle closes above $27,500, buyers will have a proper foundation to climb to higher levels.
In the daily chart, a potential breakout from the $27,500 neckline resistance of the double bottom pattern may prompt a bullish recovery in Bitcoin’s price. The midline of the Bollinger Band indicator serves as an active resistance, attempting to limit bullish growth. At the time of writing, Bitcoin’s price is up by a modest 0.8% over the last 24 hours and currently sits at $26,686. The intraday trading volume in Bitcoin has dropped by 12.5% to $5.68 billion.
Under the influence of the double-bottom pattern, the Bitcoin price is likely to witness a bullish upswing in the daily chart. This reversal could potentially breach the $27,500 neckline resistance and help resolve the current uncertainty in the market. However, there are other factors that traders should consider.
The Bollinger Band indicator shows an uptick in the lower band, offering additional support for the bullish reversal. Additionally, the Vortex indicator highlights a higher low formation in the daily Relative Strength Index (RSI) slope, accentuating active accumulation from buyers at the $26,000 level.
Despite these optimistic factors, the market remains unpredictable. An alternate scenario could see sellers overpowering the bullish momentum and causing a downturn in Bitcoin’s price. As always, traders should conduct thorough market research before taking any investment decision and be prepared for potential risks that come with trading cryptocurrencies. The market dynamics constantly change, and it is essential to stay informed and be ready to adapt to new developments.
Source: Coingape
