A sharp reversal in the price of bitcoin (Bitcoin) from an otherwise bearish technical setup has boosted its chances of hitting $58,000 in the second quarter.
Bitcoin price down?
In the daily timeframe, Bitcoin broke out of its ascending triangle up on March 27 to bring the highly anticipated $50,000 level into its range.
Interestingly, ascending triangles are continuation patterns, meaning that once it breaks out of their narrower range, they usually resolve by sending price in the direction of its previous trend.
Bitcoin, which was trending down before forming an ascending triangle, avoided further downside. Instead it succeeded Break above the pattern’s upper horizontal trend line around $45,000 and followed the upward move by reaching almost $47,700, a level last seen on January 2, 2022.
This turned out to be one of the few instances where ascending triangles form at the end of a downtrend. For example Bitcoin experienced a sharp upward retracement — from $3,100 to $14,000 — after painting a similar triangle pattern to veteran market analyst Peter Brandt between December 2018 and April 2019 written down on March 28th.
the $BTC Pattern is called ascending triangle (right). Read about Asc Tris in Schabacker, Study III, p. 93-
Also compare the current pattern with a similar structure in 2019 (left) #Bitcoin pic.twitter.com/IyB2j7f8F6
— Peter Brandt (@PeterLBrandt) March 27, 2022
The fractal increases Bitcoin’s potential for a decisive breakout from its “reversing ascending triangle” for an extended price rally towards the level corresponding to a length equal to the maximum distance between the upper horizontal of the triangle and the lower ascending trendline, ie about $58,000 as shown in the chart below.
Weekly Time Frame: $69,000 Next?
Meanwhile, independent analyst Dave the Wave expects Bitcoin to rally to its current record high of $69,000.
The analyst created the bullish forecast based on a broader ascending triangle pattern coupled with Bitcoin’s logarithmic support level on a weekly scale.
Nonetheless, his setup also offered the possibility of Bitcoin crashing back below $40,000 after failing to break $69,000.
I think the way you highlighted your chart could be a real possibility
— Peter Brandt (@PeterLBrandt) March 28, 2022
Why $52,500 is the key level
Bitcoin ascending triangles on both shorter and longer timeframe charts offer an extremely bullish outlook. However, there are still immediate downside risks when looking at critical weekly moving averages and Fibonacci retracement levels.
Notably, Bitcoin’s sustained bullish move came after it repeatedly tested its 100-week exponential moving average (100-week EMA; the black wave) as support.
Meanwhile, a 0.236 Fib line (near $36,000) on the Fibonacci retracement chart – drawn from a $69,000 swing high to a $26,000 swing low – acted as additional support. The $26,000 level coincides with the 200-week EMA (the blue wave).
Interestingly, the recovery appeared to closely resemble the price movements observed between November 2019 and January 2020. Back then, BTC’s price rally exhausted itself on reaching the 0.618 Fib line (near $10,500) in February 2020, leading to a correction towards the 200-week EMA a month later.
If Bitcoin repeats the same move in 2022, the BTC/USD pair could reach its current 0.618 Fib line near $52,500 only to then correct back towards the 200-week EMA at $26,000. Conversely, a decisive move above the Fibonacci level could trigger the ascending triangle configurations discussed above.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
https://cointelegraph.com/news/bitcoin-to-58k-next-a-2019-like-reversal-ascending-triangle-hints-at-more-upside-for-btc Bitcoin next to $58,000? A 2019-like “inverting ascending triangle” suggests more upside potential for BTC