A sharp reversal in the price of Bitcoin (BTC) from a bearish technical setup has increased its chances of hitting $58,000 in Q2.
Is Bitcoin price bottoming out?
On the daily time frame, Bitcoin broke out of its ascending triangle on March 27 to the upside, putting the long-awaited $50,000 level within its range.
Interestingly, ascending triangles are continuation patterns, meaning that they usually resolve by sending price in the direction of its previous trend once it breaks out of its tightening range.
Bitcoin, which was trending lower before forming an ascending triangle, avoided further decline. Instead, he managed break above the upper horizontal trend line of the pattern around $45,000, and followed the move up by reaching nearly $47,700, a level last reached on Jan 2, 2022.
This turned out to be one of the few cases where ascending triangles emerge at the end of a downtrend. For example, Bitcoin experienced a strong bullish pullback โ from $3,100 to $14,000 โ after painting a similar triangle pattern between December 2018 and April 2019, as veteran market analyst Peter Brandt indicated the 28th of March.
the $BTC pattern is called an ascending (right) triangle. Read about Asc Tris in Schabacker, Study III, pages 93-
Also, compare the current pattern with a similar structure in 2019 (left) #bitcoin pic.twitter.com/IyB2j7f8F6โPeter Brandt (@PeterLBrandt) March 27, 2022
The fractal increases the potential for Bitcoin to experience a decisive breakout of its โinverse ascending triangleโ, for a prolonged price surge towards the level that has a length equal to the maximum distance between the upper and lower horizontal ascending trend line of the triangle, i.e. about $58,000. , as shown in the graph below.
Weekly Time Frame: $69K Next?
Meanwhile, independent analyst "dave the wave" anticipates that Bitcoin will rally towards its current record high of $69,000.
The analyst produced the bullish forecast based on a broader ascending triangle pattern, along with Bitcoin's logarithmic support level, on a weekly scale.
However, his setup also raised the possibility of Bitcoin falling back below $40,000 after failing to break above $69,000.
I think the way you have your graph highlighted could be a real possibility
โPeter Brandt (@PeterLBrandt) March 28, 2022
Why $52,500 is the most decisive level
Bitcoin's ascending triangles on shorter and longer time frame charts present extremely bullish prospects. However, immediate risks to the downside are still present when considering the critical weekly moving averages and Fibonacci retracement levels.
Notably, Bitcoin's continued bullish move came after it repeatedly tested its 100-week exponential moving average (100-week EMA; the black wave) as support.
Meanwhile, a 0.236 Fibonacci line (near $36,000) on the Fibonacci retracement chart, drawn from a high of $69,000 to a low of $26,000, acted as additional support. The $26,000 level coincides with the 200-week EMA (the blue wave).
Interestingly, the bounce looked exactly similar to the price actions seen between November 2019 and January 2020. Back then, BTC's price rally petered out as it reached the 0.618 Fibonacci line (near $10,500) in February. of 2020, which led to a correction towards the 200 week EMA to. One month after.
Related: Bitcoin Sellers Monitor BTC Price Action Amid $45K 'Fake' Warning
If Bitcoin repeats the same move in 2022, the BTC/USD pair could reach its current 0.618 Fibonacci line near $52,500, only then to correct towards the 200-week EMA near $26,000. On the contrary, a decisive move by above the Fibonacci level could trigger ascending triangle setups, as discussed above.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
Post navigation
