Bitcoin fell 3% in a 6-hour period last night. This broke the coin out of a positive pattern, which may increase the chance of a further decline. Can Bitcoin still recover? Let’s look at the graphs.
How is BTC doing?
As usual, we start this analysis with a look at the big picture. Below we see the weekly chart, where each candle represents 7 days. This gives us a good idea of the most important price levels that have often caused price changes.
These are shown in the graph above as red and green zones. The green zone is not very relevant, as the price moves very far above this, but the red zone, on the other hand, is. This is the strongest support BTC has at the moment.
This zone has ensured that Bitcoin – after reaching its all-time high – did not fall further than $ 60,700. The price is already well above this, but it is good to have a clear red zone if BTC decides to fall further. Unfortunately, it is starting to look that way, because the currency has fallen out of an important pattern that could have been positive for the price.
The upward triangle
Bitcoin created a pattern called an ascending triangle. This pattern is characterized by increasingly higher lows, while the coin is sold around the same high. We just can’t see it on the weekly chart, so we also take a quick look at the 4-hour variant.
If you look at the chart above, you can understand why this pattern is called that. Buyers buy higher and higher, but sellers keep the price below a certain level. This usually results in a break at the upside as sell orders run out due to higher and higher buyers, but this time things played out differently.
As a result, Bitcoin is currently floating a bit in no man’s land – between this triangle and the red zone. It is somewhat logical that Bitcoin will move towards the red zone since the coin has fallen out of the triangle, but that is not necessary. It often happens that BTC returns to a pattern or important level.
In this case, that chance certainly seems to be there, because despite the coin having fallen below the blue trendline, it has not yet made a lower low. By this I mean that the coin has not yet closed a candle below its previous low. This is very positive, because until this happens, the currency is still strong.
