Bitcoin Consolidating/Pennant, Breakout Next 48 Hours Likely
Bitcoin formed a pennant over the past two weeks. Many of us were expecting deeper corrections to follow the strong downtrend on 13/14 March, but the market found strong support at 53k and reversed rather decisively the next day, climbing eventually to retest 60k.
Since then volume has consolidated into a pennant pattern with a slight bullish bias by 4 degrees on the trend angle. Pennannts are generally continuation patterns, and the longer the pennant travels, the stronger the expected breakout. Factor that with rising VFI that climbed from zero (neutral) at the start of the pattern to around 10 VFI currently, and we can reasonably forecast a strong breakout north within the coming day(s). The key is monitoring price action within the pennant and VFI to ensure no bearish divergence or signals.
Other thoughts:
I'm always conservative in my forecasts, and still think we owed Bitcoin a deeper correction after February's climb, and that correction was somewhat stifled by some good news stories, things like US Federal news/stimulus, Ripple with some -sort of- good news coming out of its plethora of legal issues, NFT hype sprinkling positive sentiment on the market and generally very bullish traders that refused to let the bears push deeper.
I think lacking that deeper correction that if we continue into the next uptrend past 60k, we could struggle to hit the 100k forecasts from the larger community, I would temper expectations the closer we get to 100k and the market will grow increasingly fearful of the top. But again I should stress I'm more conservative in my expectations and for all I know we will blow past 100k no problem.
Whats next:
-Look for indications of a breakout. Increased volatility, or a spike on VFI. Monitor smaller timeframes for early indication of possible breakout. VFI climbing above 10 or volatility crossing over 80 would be strong indicators of a breakout.
-Bullish breakout would range between 10% and 25% climb, depending on how soon it breaks from the pattern.
-This is invalidated if we see a break in the southern trendline in the pennant, currently around 56k.
Best of luck everyone!
Since then volume has consolidated into a pennant pattern with a slight bullish bias by 4 degrees on the trend angle. Pennannts are generally continuation patterns, and the longer the pennant travels, the stronger the expected breakout. Factor that with rising VFI that climbed from zero (neutral) at the start of the pattern to around 10 VFI currently, and we can reasonably forecast a strong breakout north within the coming day(s). The key is monitoring price action within the pennant and VFI to ensure no bearish divergence or signals.
Other thoughts:
I'm always conservative in my forecasts, and still think we owed Bitcoin a deeper correction after February's climb, and that correction was somewhat stifled by some good news stories, things like US Federal news/stimulus, Ripple with some -sort of- good news coming out of its plethora of legal issues, NFT hype sprinkling positive sentiment on the market and generally very bullish traders that refused to let the bears push deeper.
I think lacking that deeper correction that if we continue into the next uptrend past 60k, we could struggle to hit the 100k forecasts from the larger community, I would temper expectations the closer we get to 100k and the market will grow increasingly fearful of the top. But again I should stress I'm more conservative in my expectations and for all I know we will blow past 100k no problem.
Whats next:
-Look for indications of a breakout. Increased volatility, or a spike on VFI. Monitor smaller timeframes for early indication of possible breakout. VFI climbing above 10 or volatility crossing over 80 would be strong indicators of a breakout.
-Bullish breakout would range between 10% and 25% climb, depending on how soon it breaks from the pattern.
-This is invalidated if we see a break in the southern trendline in the pennant, currently around 56k.
Best of luck everyone!