According to the analysis of the Bitcoin market from analyst Omkar Godboul. In the article, he gives his forecast for the development of the situation on the cryptocurrency market: the slow sale of BTC over the past six weeks has led to the formation of a bullish pattern on the daily chart.
At the moment, the leading cryptocurrency has depreciated by more than 20% relative to the maximum of December 24, exceeding $ 4200. This pullback may have strengthened the main bearish trend, as evidenced by the analysis of long-term moving averages.
However, for bulls, all is not lost, since the gap between the lower highs and the lower highs reached in the last six weeks has been reduced. Thus, a downward taper or downward wedge was formed on the daily chart.
A downward wedge is a bullish reversal pattern. After its formation, the price often breaks through the upper level of the pattern and grows. An upward break, if confirmed, may trigger a stronger corrective rally.
At the time of writing this article on Bitstamp BTC is trading at $ 3400, which is 0.66% lower than a day ago. The resistance level of the downward wedge is $ 3450.
Daily and 4-hour graphics
BTC is trapped in a descending wedge on the daily chart. Meanwhile, as seen on the 4-hour chart, the cryptocurrency formed a small ascending channel inside the wedge.
The chances of an upward break of the downward wedge (above $ 3450) will decrease if the current 4-hour candle closes below the support level of the upward channel ($ 3410). This will make it possible to drop to $ 3314 (200-week moving average).
A bullish wedge breakthrough, if confirmed, will allow BTC to grow to $ 3658 - the maximum of the bear-headed gravestone formed on January 26th.
Weekly schedule
On the weekly chart, 5-candle MA and 10-candle MA tilted down, indicating a bearish mood in the market. However, declining trading volumes indicate a bearish depletion. Thus, despite the main bearish trend, a bullish breakthrough of the downward wedge can be fixed in the BTC market.
Forecast for the future
On the daily chart BTC formed a downward wedge. A move above $ 3450 will confirm the bullish breakthrough of the wedge and will make relevant the next resistance level at $ 3,658 (the maximum of the gravestone doji from January 26). Further upward movement will lead to testing of the level of psychological resistance ($ 4000).
The chances of a bullish break through the wedge will decrease if the bearish break of the upward price channel is recorded on the 4-hour chart.