BitcoinShort
Bitcoin Ascending Wedge Signals Caution
Bitcoin is currently within an ascending wedge pattern. This pattern, indicated by converging trend lines that form higher highs and higher lows, often signals a potential trend reversal, especially if momentum appears to be weakening. This is a notable caution for bullish continuation, as ascending wedges are frequently bearish reversal patterns when observed after a strong upward movement.
The price action here shows Bitcoin moving close to the lower boundary of the wedge, suggesting it is testing support within this structure. While it remains above both the green 50 EMA and red moving averages 200 EMA, which provides a general bullish bias, a break below the wedge could shift this bias and trigger a deeper correction.
The RSI indicator reinforces the cautious outlook, showing a clear bearish divergence. As the price has continued to rise, the RSI has been trending lower, forming a downward slope. This divergence indicates that while price is moving up, the momentum behind this rise is weakening, and buyers may be losing control. The RSI currently sits around the 50 level, which is a neutral zone, but with the recent downward direction, it could dip further, supporting a bearish scenario.
In terms of support and resistance, the immediate support lies at the lower boundary of the wedge and the 0.236 Fibonacci retracement level around $74,828. If the price breaks below this level, additional support can be found at the 0.382 level around $73,291 and the critical psychological support near $72,843. Resistance is found near the 1.618 Fibonacci extension level at around $77,312, which also aligns with the upper boundary of the wedge, marking a significant resistance point.
For possible scenarios, in a bullish continuation, Bitcoin could hold the lower boundary of the wedge and maintain its position above the moving averages. In this scenario, the price may attempt to move back toward the upper boundary of the wedge and potentially test the $77,312 resistance level if momentum picks up.
In the bearish scenario, if Bitcoin breaks below the wedge’s lower boundary and the 0.236 Fibonacci level, this could signal a bearish reversal. In that case, I would expect a possible pullback to $73,291 or even down to $72,843 for a stronger support test. This breakdown would align with the bearish divergence on the RSI and could lead to further consolidation or correction before another bullish attempt.
Given the ascending wedge pattern and the bearish divergence on the RSI, my position leans cautiously bearish in the short term, with a likelihood of a pullback if the lower boundary of the wedge doesn’t hold. However, if buyers manage to defend this level and RSI recovers, we could see an upward push toward $77,312 as the next target.
The price action here shows Bitcoin moving close to the lower boundary of the wedge, suggesting it is testing support within this structure. While it remains above both the green 50 EMA and red moving averages 200 EMA, which provides a general bullish bias, a break below the wedge could shift this bias and trigger a deeper correction.
The RSI indicator reinforces the cautious outlook, showing a clear bearish divergence. As the price has continued to rise, the RSI has been trending lower, forming a downward slope. This divergence indicates that while price is moving up, the momentum behind this rise is weakening, and buyers may be losing control. The RSI currently sits around the 50 level, which is a neutral zone, but with the recent downward direction, it could dip further, supporting a bearish scenario.
In terms of support and resistance, the immediate support lies at the lower boundary of the wedge and the 0.236 Fibonacci retracement level around $74,828. If the price breaks below this level, additional support can be found at the 0.382 level around $73,291 and the critical psychological support near $72,843. Resistance is found near the 1.618 Fibonacci extension level at around $77,312, which also aligns with the upper boundary of the wedge, marking a significant resistance point.
For possible scenarios, in a bullish continuation, Bitcoin could hold the lower boundary of the wedge and maintain its position above the moving averages. In this scenario, the price may attempt to move back toward the upper boundary of the wedge and potentially test the $77,312 resistance level if momentum picks up.
In the bearish scenario, if Bitcoin breaks below the wedge’s lower boundary and the 0.236 Fibonacci level, this could signal a bearish reversal. In that case, I would expect a possible pullback to $73,291 or even down to $72,843 for a stronger support test. This breakdown would align with the bearish divergence on the RSI and could lead to further consolidation or correction before another bullish attempt.
Given the ascending wedge pattern and the bearish divergence on the RSI, my position leans cautiously bearish in the short term, with a likelihood of a pullback if the lower boundary of the wedge doesn’t hold. However, if buyers manage to defend this level and RSI recovers, we could see an upward push toward $77,312 as the next target.
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