Bitcoin is forming one of my favorite bullish patterns which is a falling wedge. These patterns are a part of my playbook and I usually have good results when I trade them properly. These patterns like to break to the bullish side the majority of the time, but can fail just like any other chart pattern, so this is why I have stopped front running moves and waiting for confirmation, and even a retest of the breakout level.
What Happens Next?
What is going to be Bitcoin’s next move? Well, nobody really knows. Technical analysis is not exactly a crystal ball into the future, it gives you a statistical edge to be able to give a prediction on the next move based on past movements. So based on that, my thoughts are that we are going to see price consolidate and move sideways for a short term and then hopefully break through the upper trend line like so:
The Bearish Case…
There is a bit of a bearish sentiment in the markets right now with looming uncertainty in the overall global economy. This transitions over to the crypto markets in a big way as it is a risk on asset and hasn’t proven to be the hedge to inflation we all thought, at least just yet.
Bitcoin could go really oversold and shoot down to the 20K levels, remember the CME gap around 20.5K… So if we were to break down from here and cancel the falling wedge pattern, we could see a sharp drop down to fill that gap before a recovery bounce.
Either Way, The Dude Is Buying Bitcoin
So even with Bitcoin forming one of my favorite bullish patterns, and the possibility of it dropping to lower levels, it doesn’t really matter… I am accumulating Bitcoin for the long term. It won’t really matter in the long run if you bought at 20K or at 25K, the difference will eventually be negligible. But, if you are trading short term, be on the look out for possible moves in either direction, but again, this is one of my favorite patterns to open a long, I am just waiting on further confirmation and the breakout to put in my order.
What is your plan? Are you trading, accumulating, or sitting on the sidelines? let me know in the comments…
Nothing said is financial advice.
This is for educational and recreational purposes only!
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