Bitcoin recently experienced a downward push, reaching the daily support level. In this Bitcoin price analysis, we’ll explore the emergence of a significant triangle pattern on the Daily timeframe, examining breakout targets for the upcoming days. Yesterday, we observed a crucial support level reclaimed around $43,400, resulting in a bullish move that liquidated about 17 million long positions.
The subsequent upside momentum closed above our support area, indicating a positive trend. Notably, there was a slight increase in volume, both on the Bybit chart and platforms like Coinbase. This volume surge mirrored a previous push-down that led to the liquidation of around 17 million positions.
Examining the Daily timeframe, we identify a potential triangle formation by connecting lower highs and higher lows with diagonal areas of resistance and support. Currently, it appears to be in the early stages, with only the third leg forming.
The diagonal support level aligns with the bottom of our ascending channel, forming a crucial zone of support around $42,000 – $41,500. This zone gains significance from deviations seen in the ascending channel and the mid-level of a horizontal range. Additionally, two golden Fibonacci ratios coincide with this area, making it a compelling support level.
Considering this support, we could anticipate a potential bounce or a ‘long’ opportunity if Bitcoin approaches the golden Fibonacci ratios. However, a break below this support zone would invalidate the triangle pattern, leading to a flat correction scenario.
In the event of a lower low, indicating a flat correction, Fibonacci extension levels reveal potential downside targets. The 0.618 Fibonacci extension aligns with our higher timeframe areas of support, while the 1:1 Fibonacci extension lands around $39,800, corresponding with a significant daily high timeframe support.
Analyzing order flow, a slight bullish divergence is observed, with a higher low forming on the Bitcoin chart and a lower low on the CVD indicator, suggesting absorption. However, caution is advised until a decisive move above the resistance zone at $43,400 occurs.
While short-term fluctuations might occur, a more bullish stance is warranted only after reclaiming the resistance zone. Traders should monitor the reaction around the support zone and consider long positions if the triangle pattern holds. Despite current corrections, the overall trend remains upward, with the potential for Bitcoin to surpass previous highs above $45,000.
Disclaimer: The market presents both bullish and bearish scenarios, emphasizing the importance of careful monitoring and strategic decision-making.