This is bitcoin daily timeframe chart.
As you can see, there is a potential rising wedge pattern forming on the chart.
In a rising wedge there is always 5 waves.
I did posted this on my Twitter page when the price was around 40k. I said if this a rising wedge then we should expect another leg up to around 56k to complete the wave 5 and it was exactly as I predicted so what next. Well you can see that this pattern has proven to be very effective because if you take a look at the chart you can see that we had that same pattern when bitcoin price hit 12k in August 2020 and the price plummet down by 18 percent when bitcoin broke down from the pattern.
We also had same pattern when the price hit 64k and the price also plummet from 64k to 29k that’s about 51 percent drop.
This pattern just appeared again, even though it hasn’t been confirmed yet but it’s looking like a legit Pattern for now because the upper line is acting as resistance.
Rising wedge is a bearish reversal pattern. You can also call it a short term bullish continuation pattern as long as the price is still trading inside the wedge we should expect the price to keep making higher high and higher low but it doesn’t change the fact that it’s a bearish reversal pattern.
HOW TO TRADE IT
If you are looking to trade this pattern please note that it can break to the upside because sometimes a bearish pattern can break bullish and a bullish pattern can also break bearish too that’s why it’s is advisable to always wait for a breakout before trading any pattern.
So if you want to trade this pattern wait for the price to break out of the pattern. The technical price target for a rising wedge pattern if it breaks down is the bottom of the wedge which around 29.6k.
But Incase it breaks to the upside, the potential target is around 75.6k but be careful because a break to the upside could be a fake out.
Remember wait for breakout confirmation before trading this pattern just to be on a safer side.
I will keep you posted anytime we break out of the pattern.
As you can see, there is a potential rising wedge pattern forming on the chart.
In a rising wedge there is always 5 waves.
I did posted this on my Twitter page when the price was around 40k. I said if this a rising wedge then we should expect another leg up to around 56k to complete the wave 5 and it was exactly as I predicted so what next. Well you can see that this pattern has proven to be very effective because if you take a look at the chart you can see that we had that same pattern when bitcoin price hit 12k in August 2020 and the price plummet down by 18 percent when bitcoin broke down from the pattern.
We also had same pattern when the price hit 64k and the price also plummet from 64k to 29k that’s about 51 percent drop.
This pattern just appeared again, even though it hasn’t been confirmed yet but it’s looking like a legit Pattern for now because the upper line is acting as resistance.
Rising wedge is a bearish reversal pattern. You can also call it a short term bullish continuation pattern as long as the price is still trading inside the wedge we should expect the price to keep making higher high and higher low but it doesn’t change the fact that it’s a bearish reversal pattern.
HOW TO TRADE IT
If you are looking to trade this pattern please note that it can break to the upside because sometimes a bearish pattern can break bullish and a bullish pattern can also break bearish too that’s why it’s is advisable to always wait for a breakout before trading any pattern.
So if you want to trade this pattern wait for the price to break out of the pattern. The technical price target for a rising wedge pattern if it breaks down is the bottom of the wedge which around 29.6k.
But Incase it breaks to the upside, the potential target is around 75.6k but be careful because a break to the upside could be a fake out.
Remember wait for breakout confirmation before trading this pattern just to be on a safer side.
I will keep you posted anytime we break out of the pattern.