Bitcoin in the sideways: correction or the beginning of a new growth phase?
Bitcoin trades within a falling widening wedge pattern.
Wave analysis promises a new decline for the pair.
The market is likely to have formed a head-and-shoulders pattern on short-term timeframes..
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On April 12, Bitcoin peaked at $ 7140, but almost immediately began to aggressively decline from it.
After that, the price is persistently trying to grow, but has not yet been able to break through important resistance levels that would confirm the start of a new upward trend. Rather, the current price action resembles a correction after a decline.
Downward widening wedge
The bitcoin rate (BTC) is moving along the line of downward resistance, and, possibly, from April 6, it has been trading within the “falling widening wedge” pattern. At the time of writing, the price is in close proximity to the resistance line of this wedge.
Over the past two days, the RSI has been moving freely on both sides of the 50 level. Such dynamics may indicate a period of consolidation. However, the further direction of the price movement is still unclear..
You can try to apply wave analysis to this chart, which allows us to assume that the price is inside wave (e) within the a-b-c-d-e model. If this theory is correct, it means that BTC is currently in the process of launching the third sub-wave, which should bring the price to the $ 6500 support line..
“Head and shoulders”? maybe
On the shorter timeframe, you can also find confirmation that Bitcoin will continue to decline. After a sharp decline on April 13, the price strengthened, but this growth was resolutely rebuffed around the 0.618 Fib level.
In addition, the pair may have formed a head and shoulders pattern and are now working to create a right shoulder of this pattern (declining high).
If the pattern is finally formed and confirmed, a subsequent bearish break could push the price to lows around $ 6,600, and possibly towards the falling wedge support line at $ 6,300.
Thus, since April 6, the bitcoin rate has been trading within the falling widening wedge pattern. The price has now reached the resistance line of this pattern and is expected to start declining soon with an ultimate target in the $ 6,300 region..
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