A rising wedge, which is oftentimes coupled with bearish divergence is occurring on the weekly Bitcoin chart. Typically after the breakdown of the wedge, there will be a lower high while also falling below key moving averages, which has appeared most recently. It is very well possible for this lower high to move a bit higher to 29K-30k or even form a double top. The overall idea of rising wedges/bearish divergence is that momentum is slowing. When swing highs move past the previous highs by lesser and lesser amounts, reversals often take place OR you need a reset. By reset I mean if the price is able to consolidate long enough without a breakdown of key support levels, in this case 25K, bearish divergence is void and the trend can continue. By long enough, one of the things I look for is the MACD has moved closely back to the zero line, and in this case it actually is relatively close. Additionally, because 25K has held, it is not a picture perfect short, but the direction is still most likely down in my opinion, for now.
For an ideal short, something closer to a break to 24k, trapping shorts, then a lower high above 25K, then a large sell off to 22kish or even lower after a bounce. For a reference, it's more or less the same pattern of my most recent SPY options trade, 9/18, 1 minute chart, about 11:43am est - 12:54am est for the time of the wedge. It's a fairly reliable and common reversal on all timeframes and asset classes. Others might vaguely call it a distribution phase, but I like being more specific.
If Bitcoin were to reach 30kish+, then start to base out at around 28k forming a higher low, that would be bullish and the short would be off.
A couple side notes. It is very common for this pattern to trap retail longs (bearish divergence/rising wedges) and trap retail shorts (bullish divergence/falling wedges). For additional references, look at the SPY on the daily and weekly chart with a MACD on it for 2022. On the daily timeframe, bullish divergence has led to every bear market rally and on the weekly timeframe, it has led to the SPY current bottom. Higher lows after a bullish divergence or lower highs after a bearish divergence can be used as confirmation to increase accuracy. After seeing so many of these, you could just look at the price and know a divergence exists without even looking at the MACD. The RSI can also be used to spot divergences, but it's choppier.
Additionally, Bitcoin's daily chart at the beginning of 2021 had bearish divergence, the summer had bullish divergence with the wicks, the drop before September had bearish divergence and the end of 2021 had bearish divergence which then led to weekly bearish divergence later on marking the top. Even Bitcoin's current cyclical bottom on the 3 day chart shows bullish divergence since the Nov 2022 low was barely lower than the Jun 2022 low.
For an ideal short, something closer to a break to 24k, trapping shorts, then a lower high above 25K, then a large sell off to 22kish or even lower after a bounce. For a reference, it's more or less the same pattern of my most recent SPY options trade, 9/18, 1 minute chart, about 11:43am est - 12:54am est for the time of the wedge. It's a fairly reliable and common reversal on all timeframes and asset classes. Others might vaguely call it a distribution phase, but I like being more specific.
If Bitcoin were to reach 30kish+, then start to base out at around 28k forming a higher low, that would be bullish and the short would be off.
A couple side notes. It is very common for this pattern to trap retail longs (bearish divergence/rising wedges) and trap retail shorts (bullish divergence/falling wedges). For additional references, look at the SPY on the daily and weekly chart with a MACD on it for 2022. On the daily timeframe, bullish divergence has led to every bear market rally and on the weekly timeframe, it has led to the SPY current bottom. Higher lows after a bullish divergence or lower highs after a bearish divergence can be used as confirmation to increase accuracy. After seeing so many of these, you could just look at the price and know a divergence exists without even looking at the MACD. The RSI can also be used to spot divergences, but it's choppier.
Additionally, Bitcoin's daily chart at the beginning of 2021 had bearish divergence, the summer had bullish divergence with the wicks, the drop before September had bearish divergence and the end of 2021 had bearish divergence which then led to weekly bearish divergence later on marking the top. Even Bitcoin's current cyclical bottom on the 3 day chart shows bullish divergence since the Nov 2022 low was barely lower than the Jun 2022 low.