In recent news, Bitcoin’s minimal decline since its July apex around $32,000 has had market watchers fixating on an intriguing trendline – a potential map of the cryptocurrency’s future trajectory. Demonstrating classic bullish movements, Bitcoin has rallied by 70% since the beginning of the year, clocking higher fluctuation lows and peaks.
The trendline under inspection links the lows of the early part of 2021 with the swing lows recorded in March and June. As it stands, the trendline dipped just below $28,000 whilst Bitcoin itself hovered near $28,600.
If the cryptocurrency’s performance were to breach the trendline, the bullish trend would risk becoming obscured, warns Peter Brandt, Chief Executive Officer at Factor LLC. As an experienced foreign exchange and commodity markets trader of over thirty years, Brandt advocates for watchful trading.
In his anticipatory approach, he maintains a balanced stance on trading. If a downward shift of Bitcoin’s performance becomes evident, achieving the opposite – a bullish trend, would require a ‘bear trap’. This ‘trap’ would imply that a potential trendline breakdown would be rapidly counteracted by a price reversal that could leave sellers in a precarious position. Such failed major support level collapses are typically seen as staunch bullish indicators.
Markus Thielen, Matrixport’s Head of Research and Strategy, believes that should the trendline be invalidated, Bitcoin might face more significant losses. If the cryptocurrency’s trending escalation line is breached, the $25,000 support level, co-related with the Blackrock Bitcoin ETF filing,
might be at risk to be examined again. Thielen consequently advises investors to tread cautiously, keep holdings at a manageable level, and consider options for mitigation purposes.
Plunging through the stiff resistance of $25,000 in March, Bitcoin transformed such a level into a support, and was rigorously examined in June pre to Blackrock’s filing for a spot bitcoin exchange-traded fund. For now, it remains to be seen how well founded the trendline proves to be, and what maneuvers market players will need to navigate in the event of the line being invalidated. Careful observation and strategic adaptations will be key.
Source: Coindesk
