Current falling wedge and breakdown:
On the 4-hourly timeframe chart, the price action of Bitcoin has broken down the support of the rising wedge pattern. After placing the volume oscillator indicator it can be seen that the volume is not supporting this breakdown because the oscillator is moving in a negative territory.
Previous rising wedge:
Some people are comparing this breakdown with the previous breakdown of the rising wedge which was happened in May 2021 and led to a very strong bearish rally towards the downside. If we take a look at the previous breakdown then it can be easily seen that previous breakdown was supported by the powerful sell volume as the volume oscillator is showing the high value.
Different support and resistance levels:
On the daily time frame it can be easily seen that the price action of BTC has been rejected by the strong resistance of $42000 and now moving below $39500 support level which is now turned into resistance the next support is at $36000.
Falling wedge:
On the small time frame 1-hourly chart, the price action has formed a falling wedge pattern and it is considered as a bullish reversal pattern trader’s community. Therefore, there is a possibility that the price action will start a reversal move from here and break out of resistance of this wedge .
Bullish Shark move:
On the 4-hourly time frame chart, the priceline of BTC has completed the final leg of bullish Shark pattern. Which is also a bullish reversal pattern.
Conclusion:
Even though the price action has broken down the support of rising wedge , but the formation of two bullish reversal patterns ( falling wedge and bullish Shark ) can trigger a bullish divergence .
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