Bitcoin on the Brink: Will the Price Surge Push Beyond Expectations?

"Bearish Momentum Looms as Bitcoin Consolidation Continues at $38K, RSI Divergence Raises Concerns"

Consolidation Phase and Potential Correction in Bitcoin Price

The daily chart of Bitcoin (BTC) shows a consolidation phase, with the price facing rejection at $38,000. This has resulted in subdued volatility and price movements within a range capped by $35,000 and $38,000. The consolidation, coupled with an extended bearish divergence between the price and the relative strength index (RSI), suggests that bullish momentum may be weakening, potentially leading to a correction.

A closer look at the four-hour chart reveals the formation of an ascending wedge pattern, which is typically considered a bearish reversal signal. At the same time, a head and shoulders pattern is nearing completion, with the right shoulder taking shape. This pattern is a crucial indicator of a potential bearish reversal, becoming valid if the price dips below the pattern’s neckline. A break below the wedge pattern could lead to a price drop below the key support level at $32,300, marked by the 0.5 Fibonacci retracement.

On-chain analysis provides another layer of insight. The movement of Bitcoin from miner wallets to exchanges usually indicates an increase in market liquidity and selling pressure. However, there has been a decline in such activity to levels not seen since 2017. This may suggest that miners are holding onto their coins, which could be interpreted as a bullish sentiment.

As for the altcoin market, Shiba Inu (SHIB) is exhibiting a symmetrical triangle pattern on its chart. This pattern is characterized by two converging trendlines as the price swings high and low within a tightening range. The direction of the breakout from this pattern will provide insight into future price trends. Traders are closely watching for a breakout as SHIB approaches the apex of the triangle.

Volume profiles during this period do not show any significant spikes, indicating a cautious market sentiment with no firm decision from participants. A notable increase in volume would be necessary to validate any potential breakout and provide the conviction needed for a sustainable price move.

The recent pattern of lower highs and higher lows in SHIB suggests an impending volatility spike. However, without a clear increase in trade volume, it is challenging to predict the direction of the breakout. A break above the triangle’s upper trendline would suggest bullish sentiment and potentially lead to a price surge.

Turning to Dogecoin (DOGE), the chart shows that it has recently bounced off moving averages, indicating a strong area of support around the $0.078 price point. This level has become a litmus test for the meme coin, as maintaining above it may attract further buying interest. On the other hand, a fall below this level could trigger a sell-off and test lower support levels.

Currently, DOGE is facing resistance near the $0.085 mark, where consolidation of sell orders has been observed in the past. A breakthrough above this resistance could pave the way for DOGE to target the next psychological level at $0.1, a level that has proven elusive in recent times.

The trading volume for DOGE has been relatively stable, without any significant spikes, suggesting a lack of aggressive trading at the moment. However, given the volatile nature of the crypto market, any increase in volume could quickly change the current dynamic.

In conclusion, Bitcoin is experiencing a consolidation phase with potential signs of weakening bullish momentum. Altcoins like SHIB and DOGE are exhibiting patterns that suggest impending volatility and possible breakouts. Traders will be closely monitoring these developments to determine the future direction of these cryptocurrencies.

(This article was originally published on U.Today)

Martin Reid

Martin Reid

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