It's been an interesting week. Bitcoin has seen a remarkable recovery from the lows at $7,000.
There has been fresh optimism in the market however my previous prediction of $5,000 remain in place until Bitcoin can break the $11,800 area. Until then, there are still great trading opportunities!
If we now look at the chart of Bitcoin, we can see that price broke out of a falling wedge pattern a couple of days ago. While I do not specifically trade these patterns, I will drawn them on the chart as a reference point.
(Right-click and open image in new tab for full-size)
In previous posts, I had mentioned the bullish price action did not look too convincing. We are seeing this price action again with slightly HIGHER HIGHS. This is not a good sign for the bulls as it tends to lead to a rising wedge pattern which is taking formation now.
This pattern is generally traded on a break of the trendline to the downside. Should this occur, we can expect a re-test of the $7,000 level which would signify further weakness in the cryptomarket and a case for Bitcoin to fall towards the $5,000 area.
However, if there is sufficient buying strength we could see a pop out the top of the rising wedge that can reverse immediately or consolidate and push higher.
There is also a larger time frame inverted head & shoulder pattern that would complete at the $8,000 area. This coincides with the 61.8% Fibonnaci retracement level from $8,600 to $7,000 area. Leaving a partial position on a long trade should be considered in case this pattern does complete.
Let's see how far the BULLS can push the price of Bitcoin up!!!
Interestingly, there are a number of bullish break out patterns setting up on the major altcoins that I am keeping an eye on with potential excellent returns:
- Altcoin 1: Potential 30% ROI with 5:1 R/R
- Altcoin 2: Potential 15% ROI with 4:1 R/R
Leave an upvote and comment and I might give a hint :)
