Bitcoin Bounces Off Important Technical Support
Updated
After breaking out of a shorter term downtrend at the beginning of November, Bitcoin has tested the trendline as support yet again, and has formed a broadening wedge structure. Of course, how we view these structures can always change, but I do find trendlines like these pretty helpful.
I think if the correction is already over, we should see Bitcoin break above the broadening wedge and head towards a new all-time high. Broadening wedges can provide a much stronger breakout than a narrowing wedge, since the pattern shows INCREASING volatility as it nears completion. This means the final move can be the most volatile. The pink line above is a long term trendline, where BTC might find immediate resistance on an upside move. Currently, it's near 80k. This means a break of the broadening wedge can lead to a 30% move. What's also promising is that after breaking below the important 58k level, Bitcoin found significant demand, and is now back above the support, showing a failed low.
Of course, BTC will first need to break out from the wedge resistance - currently around 63k. I would like to see leveraged traders stay biased to the downside, or at least neutral to provide fuel for such a move.
On the bearish side, if Bitcoin cannot hold above that broken channel, and if it breaks DOWN from the broadening wedge, I think we can see sub 50k prices. But based on volume, sentiment, and structure, I'm not sure we get there. The bottom of the wedge currently aligns with the
52K area, which can also serve as strong support.
This is meant for speculation and entertainment, not financial advice.
-Victor Cobra
I think if the correction is already over, we should see Bitcoin break above the broadening wedge and head towards a new all-time high. Broadening wedges can provide a much stronger breakout than a narrowing wedge, since the pattern shows INCREASING volatility as it nears completion. This means the final move can be the most volatile. The pink line above is a long term trendline, where BTC might find immediate resistance on an upside move. Currently, it's near 80k. This means a break of the broadening wedge can lead to a 30% move. What's also promising is that after breaking below the important 58k level, Bitcoin found significant demand, and is now back above the support, showing a failed low.
Of course, BTC will first need to break out from the wedge resistance - currently around 63k. I would like to see leveraged traders stay biased to the downside, or at least neutral to provide fuel for such a move.
On the bearish side, if Bitcoin cannot hold above that broken channel, and if it breaks DOWN from the broadening wedge, I think we can see sub 50k prices. But based on volume, sentiment, and structure, I'm not sure we get there. The bottom of the wedge currently aligns with the
52K area, which can also serve as strong support. This is meant for speculation and entertainment, not financial advice.
-Victor Cobra
Note
Here's the chart zoomed out, where you can see the pink trendines. After touching the top pink trendline in 2019, it took Bitcoin nearly TWO YEARS to test it again. If Bitcoin tests the top trendline by Christmas, that puts the peak conservatively at 130k. Above the pink trendline, and Bitcoin would probably blow-off pretty quickly and it would be a great selling opportunity. Note
It's taking some time for Bitcoin to find its footing here, but it's still holding the structure. Getting pretty close to the resistance, and currently butting up against a more aggressive short term downtrend Note
A breakout from the broadening structure could send Bitcoin pretty quickly to another all-time high.
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