For the past few days, Bitcoin has maintained its position above a significant horizontal range. In today’s Bitcoin price prediction, we’ll delve into a emerging pattern that has captured the attention of retail traders. However, it’s crucial to understand the risks associated with trading an impending breakout.
Yesterday, Bitcoin experienced an upward push, breaking through recent highs. This movement was attributed to substantial absorption occurring at a critical support level. A closer look at the Bitcoin price reveals the formation of a higher low, while the CVD indicator simultaneously recorded a lower low, indicating selling pressure at the support zone. Despite this, the price did not decline but rather formed a higher low, signaling absorption at the support level, indicative of a bullish divergence.
The current scenario has led many retail traders to observe a potential ascending triangle pattern forming. This pattern, characterized by equal-sized peaks and a horizontal resistance line, often suggests a higher probability of breaking upwards. Notably, the market sentiment appears bullish, with increased buying pressure and open interest. However, caution is advised, as a failure to sustain the upward momentum could result in a bearish reversal.
Analyzing the volume dynamics within the pattern, we observe significant volume spikes during upward movements and high volume during rejection candles. This indicates that bears currently exert control in the market, pushing the price lower on increased volume. If a breakout doesn’t occur soon, a potential liquidity grab below previous lows may take place, presenting an opportunity for traders to initiate long or buying positions.
On the 4-hour timeframe, a less-discussed ascending channel has formed over the past few days. Connecting higher highs with a diagonal line, this channel is marked by a critical mid-level at $43,200. A break below this level could signal further downside movement, necessitating a thorough analysis of potential support levels.
As Friday unfolds, it’s essential to pay attention to the breakout scenario. If the breakout doesn’t happen, the pattern may extend into the weekend, possibly leading to a fakeout. Traders should remain vigilant, considering potential liquidity grabs below previous lows for strategic entries.
A comprehensive approach involves examining various indicators, including RSI and money flow. Both indicators currently show bearish divergences, suggesting a potential downturn. Traders should remain cautious, especially if a breakdown from the ascending triangle occurs.
In conclusion, while the current trend is bullish, it’s crucial to monitor key levels, such as the $43,200 mark. A failure to reclaim previous highs could indicate a shift in momentum, prompting a reassessment of trading strategies. As always, risk management is paramount, and traders must be prepared for various scenarios, including potential fakeouts and reversals.
