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The price of Bitcoin (BTC) has been showcasing bullish patterns since October, leading to six consequent weeks of an upward price increase. This trend has been particularly evident under technical analysis, where Bitcoin’s price patterns have been encapsulated in a symmetrical triangle since November. A pivotal question at this point is whether this upward trajectory would prevail, or would it encounter a setback.
It’s been observed that the price of BTC began a swift hike from October. This resulted in breaking away from the declining resistance trend that had persisted for 530 days. A significant yearly high point of $38,437 was crossed on November 24, followed by a minor decline. A highlight in this uptick is the fact that Bitcoin managed to form six successive bullish weekly candlesticks. An exactly similar pattern took place in October 2020 when Bitcoin was entering a bullish cycle. Market traders often utilize the Relative Strength Index (RSI) to determine oversold or overbought conditions and make calculated decisions on accumulating or selling assets. Positive readings above 50 suggest that bulls still have the edge, while readings below 50 imply a bearish outlook. The RSI currently continues to ascend but is in the overbought territory. Intriguingly, a similar RSI reading was recorded in October 2020.
Cryptocurrency analysts are looking at the BTC price based on indicators and past trends. According to some, with Bitcoin’s rate of increase, the price could even break out soon, potentially causing an explosive movement that is expected to take the price way out of the current upward-sloping trend. Based on the Elliott Wave (EW) theory, which uses recurring long-term price patterns and investor psychology to predict a trend direction, the most plausible count proposes that BTC is currently in the third wave of a five-wave increase, which started in September. The corrective sub-wave, presented as triangle-shaped, represents the most common pattern for this wave. If Bitcoin manages to break away from this triangle, it can increase by 10% to the next resistance level of $41,000. However, a breakdown from the triangle could result in a 6% drop down to the nearest support level at $35,000. This information can be a crucial factor to financial experts and investors in making future trading decisions.
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