Hey! After the tiny-rally Bitcoin’ price is on the consolidation phase. Currently, it is on the triangle and ready to make a breakout to either direction (this is a triangle specificity). Let’s search some confirmations when the breakout really gets confirmed.
Firstly we have to get at least 1H or 4H candle close outside the triangle.
Let’s start from bearish close – close below the triangle: At the moment, the price is closer to the triangle bottom trendline which is pulled from the wicks. We haven’t made a lower low but we have made a lower low close – not a good sign. The last 4H and last 1H candles closed below the strong gray area. Previously it has worked nicely as a support and this level has made several rejection upwards but currently, we got a candle close below that and to go upwards we need to go fastly above the gray area to remain into the bullish momentum. The volume is low but the sudden spike may happen quickly. Now, if we don’t get a sudden spike upwards then we might fall lower and fall below the triangle which is the first bearish confirmation. Also, we have a funny chart pattern, a continuation pattern called “Cup and Handle”. A candle close below the triangle and outside of the cup will give us two bearish signals and the drop may come pretty sharply down to the major support level at $3,850. There is another strong gray area and it has to hold us IF we want to see another wave up from there. So, a bearish confirmation comes after the break below the triangle and break below the cup/curve support line!
Now the bullish scenario: Firstly we have to get a quick pump up above the gray area and above the trendline which both act as a strong resistance level . To do that, You have to watch volume and if the breakout happens with nice volume inside the candle it would be another confirmation that the bulls are back in the market and they are ready to push the price into another wave. Second confirmation comes after the triangle breakout upwards – at least a 1H or 4H candle close above the upper triangle trendline . If this happens then the Cup and Handle pattern will show us the first target which is a little bit above the semi-round number ($4,500) around $4,600, after that just a little throwback around the Daily strong area at $4,320 – role reversal, old resistance becomes a support – and the climb may continue to the $5k. The climb may continue because of the Cup and Handle chart pattern which is a continuation pattern!
SUMMARY: As You see, to be bullish , the road is harder than to be bearish . This Cup and Handle is a great and funny pattern but currently it gives us also a bearish signal – after the break out/fall out the cup (like the water falls out if the cup gets crack) ;). You should get a confirmed short-term direction after the breakout from the triangle. From the bottom we have multiple bullish chart patterns and several great price level which should hold the price for another drop but be ready if the market starts to make a throwback and You know those confirmations when this will happen!!
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*This information is not a recommendation to buy or sell. It is to be used for educational purposes only!