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Following yesterday selloff that sent Bitcoin down to lows of $9,500, the cryptocurrency’s buyers have been able to absorb the intense selling pressure and push BTC higher, with it finding some decent stability within the upper-$9,000 region.
In the near-term, BTC does appear to be entering another fresh uptrend, as it is currently in the process of retesting the $10,000 region.
It is important to note that the benchmark cryptocurrency has also been trading within a descending channel, with its ultimate reaction to this pattern likely setting the tone for how it will trend in the weeks and months ahead.
Bitcoin Exits Consolidation Phase, and a Big Trend-Defining Movement is Inbound
At the time of writing, Bitcoin is trading up 3% at its current price of $9,950, which marks a notable upwards movement from the consolidation phase it had been caught within around $9,600.
BTC’s recent break below $10,000 had led many analysts to believe that the crypto’s bullish market structure was on the cusp of being invalidated, but its signs of bullishness in the time since this drop occured seems to have invalidated this bearish sentiment.
Whether or not the crypto continues climbing higher or starts seeing intense bearishness could depend on how a descending channel it is currently caught within resolves.
Teddy, a popular cryptocurrency analyst and trader, spoke about this in a recent tweet, explaining that a bullish breakout could validate it as a bull flag, whereas a break below could spark a bout of capitulation.
“BTC: Crucial moment right now, as a bounce or break below this level will define where the trend will go in the mid-term. 1. Is this a bull flag? break small down channel and continue uptrend? 2. Break below, and build greater down channel?”
https://twitter.com/teddycleps/status/1229705052023119872?s=21
History Suggests This Next Move Will Favor Bulls
While looking at the aforementioned pattern, it is important to note that this isn’t the first time that that Bitcoin has found itself caught within a similar descending channel, with the same pattern previously resulting in notable uptrends.
“BTC: Price did indeed repeat pattern: 1. Rising wedge 2. Strong rejection from resistance 3. Break support 4. Make everyone freak…out 5. Retest previous resistance as support (as we speak)…and hopefully 5. Bounce to Pluto,” he explained.
https://twitter.com/TeddyCleps/status/1229730318392995841?s=20
If this pattern does resolve in a sustained bull-favoring movement, it is highly probable that it will once again fly past $10,000 and potentially set fresh year-to-date highs.
Featured image from Shutterstock.
