The largest cryptocurrency, Bitcoin, has impressively withstood the recent sell-off in the crypto market. While the majority of altcoins witnessed prolonged corrections, BTC remained sideways, holding crucial support levels. Despite highly volatile behavior, the coin’s price strictly adheres to the long coming wedge pattern, indicating a reliable chart setup for predicting the near-term future.
The decreased volume throughout the two-month correction phase suggests that this downfall is temporary. Completing the wedge pattern will end the Bitcoin price’s current sideways trend. The intraday trading volume in Bitcoin is $12.2 billion, indicating a 22% loss.
Over the past six days, the Bitcoin price has showcased several short-bodied candles with long-rejection wicks on either side. These candles of uncertainty reflect no clear dominance from buyers or sellers, proposing that coin holders could witness high volatility in the coming days. While prices may continue the sideways action for a week or two, the wedge pattern’s trendlines are gradually converging, indicating that the narrow space will soon trigger a breakout opportunity.
In theory, the wedge pattern is a continuation pattern, and therefore, the Bitcoin price is likely to break the overhead trendline. The potential breakout will accelerate the bullish momentum and may offer entry opportunities to traders, with the post-breakout setting the BTC price to shoot above $30,000. The support trendline of the wedge pattern has prevented the Bitcoin price from experiencing excessive downfall despite increased bearishness in the crypto market. Consequently, the coin uses this level as a key support to maintain a bullish outlook. Until that trendline is intact, the Bitcoin price is less likely to go below $25,000.
The daily Relative Strength Index (RSI) slope wavering below the midline (50) gives a slight negative momentum in price. Meanwhile, the 50-day and 200-day Exponential Moving Averages (EMAs) aligned with the converging trendline provide additional confirmation of a narrow range, with a breakout triggering a directional rally.
However, as exciting as this wedge pattern may be for Bitcoin enthusiasts, it is crucial to keep a healthy dose of skepticism in mind. The crypto market is known for its unpredictable nature and rapid fluctuations. It is essential to conduct thorough market research and be prepared for changes in the crypto landscape.
In conclusion, the Bitcoin price’s adherence to the wedge pattern presents optimism for traders seeking a breakout opportunity. However, it is equally crucial for investors to remain cautious and well-informed in this ever-changing market. As always, personal financial decisions should be made after careful consideration and research.
Source: Coingape
