Hi friends, hope you are well, and welcome to the new update on Bitcoin.
Testing the support of wedge.
The price action of the leading cryptocurrency is dropped more than 11% in a single day. Now it is re-testing the support of the rising wedge pattern on the daily time frame chart. So far the priceline is not closed below the support.
Important price level support.
There is another very important support just below the support of the rising wedge pattern at $33500. This level has been previously working as support very well. Therefore, in order to confirm any kind of breakdown the price action needs to break down the support of wedge and $33500 as well. If these supports will be broken down then Priceline can reach the tail of the triangle which is approximately $28800. But if the price action will be not able to break down these supports then it can move towards the upside to make another attempt to break out of the resistance of wedge.
Big falling wedge:
On the bigger picture, the price action of Bitcoin has formed a big falling wedge pattern around the rising wedge pattern. At the same time, the price action is moving the resistance of this big falling wedge and at the support of the rising wedge pattern. Therefore, it is make-or-break time for Bitcoin. In case Bitcoin breaks out the resistance o the falling wedge, then the next target can be $41000, this is the level where we have the tail of the falling wedge. But we need to watch the closing on the daily timeframe, not on the small timeframes. Because the smaller timeframes and give false signals.
The long term trend is bullish:
If we switch to the long-term weekly chart then we are still bullish. The price action o the king of all cryptocurrencies is having good support of the lower bands of Bollinger Bands and for 18th weeks the stochastic RSI is moving in the oversold zone very close to the zero levels and the MACD is turning bullish.
Conclusion:
It is a very important time for Bitcoin because at the same time it is testing the support of the rising wedge in trying to break out the resistance of the falling wedge. In the long-term charts, the oscillators are extremely oversold. The next few hours are very important we may observe a massive rally towards the upside or in case of break down the support, there can be a move towards the downside in the midterm and short term to re-test the $31K to $28.8K support zone.
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