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Disclaimer: The findings of the following article are the sole opinions of the writer and should not be taken as investment advice
Bitcoin‘s price, at press time, was in a bullish pattern, with most expecting it to break out and retest its ATH at $42,000. However, BTC’s recent correction suggests that it might be a while before the price does so. In addition to the overall bullish pattern, a new bullish pattern was forming at the time of writing, one pointing to a small surge in the short-term for the cryptocurrency.
Bitcoin 1-hour chart
The 1-hour chart showed a bigger parallel channel, with the price heading for another breakout. While the breakout seemed to be on its way, the price formed another descending channel. Looking at its previous trend, the pattern can be considered to be a bullish flag, implying that a breakout might be coming soon.
In addition to the aforementioned patterns, the RSI indicator showed a trickle towards the neutral zone, projecting a bounce similar to the one seen a few hours ago. The same can be seen with the OBV, with the indicator bouncing off the horizontal line, as seen in the above chart. This indicated that the buying pressure was preventing the price from heading lower.
According to the bullish flag pattern, the theoretical breakout from the top of the pattern will be 7-8%. Considering Bitcoin’s path towards the lower trendline, one can expect a total surge of 12%. Hence, a long position should do the trick as the price heads towards the lower trendline of the bullish flag. Adding bullish bias to this was the SuperTrend indicator, with the same flashing a buy signal.
Here, it is worth noting that a breakdown below the SuperTrend’s buy signal at $37,555 would threaten the bullish scenario pointed above. However, if the price closes below the $36,425-level, then a reversal can be expected. In such a case, BTC can head back to the middle line of the descending channel.
Bitcoin can rebound off the support levels at $33,400 and $32,765, levels present just below the middle line.
Image Credit: Refer to Source
Author: Refer to Source Akash Girimath