Pattern Formed, Will BTC Break High After Regaining $17,000?

After falling below $16,000 in the past 3 weeks, the volatility of BTC/USDT has decreased significantly and the price fluctuation at the support line is similar to that in October this year.


It seems that with each successive price reduction, the indecision of sellers and buyers increases. So last week, the price first rushed down, once again tested the $16,000 mark, and then bounced up. But the strength of the Bulls was only enough to get to the $17,242 mark.

 

Meanwhile, the verdict on "digital gold", as Bitcoin was recently called, was issued by the CEO of the ECB's payment infrastructure direction, Ulrich Bindzail, and adviser Jurgen Schaaf. As stated in their review, Bitcoin is neither an acceptable means of payment nor a form of investment, and therefore should not be legitimized by regulators. The financial sector should beware of the long-term consequences of promoting bitcoin investments, despite possible short-term gains.


"The negative impact on customer relations and the reputational damage to the entire industry will be huge when bitcoin investors suffer further losses" according to the European Central Bank (ECB).

In their opinion, the concept of bitcoin and technological imperfections call into question the acceptability of cryptocurrency as a means of payment.


"Bitcoin has never been used to any significant extent for transactions in the real world," experts say.

However, all these are just words, as practice shows, after loud statements by experts, the price often goes in the opposite direction. Who knows, maybe it's time to buy...

 


Technical Analysis

As for the technical forecast for the coming week, two scenarios are possible, both a return to the support level and an exit beyond the resistance level.


As we can see on the daily price chart, all price movements for the last half of the year can be conditionally divided into 4 cycles, the last of which is currently taking place and all of them took place within the side channel.


In the first cycle, which lasted about 2 months, as a result, the lower boundary was broken. In the second cycle, the Bulls broke through the resistance, after which the third cycle began, which ended three weeks ago with a lower breakout. Now we are witnessing the 4th cycle, where the price is also trading within the side channel, which has a support and resistance zone. As mentioned above, the volatility is not high and is around $2000. From the point of view of technical analysis at the moment, the chances of Bulls and Bears are equal. However, on the chart itself, we see that the price has been pressed to the resistance level for several days already, and most likely this week the Bulls will try to fix above $17,000. 

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But on the weekly chart, the prerequisites for a reversal finally appeared. So we see a new low formed, which is lower than the previous one, while three highs were consecutively one below the other. Thus, a falling wedge pattern has formed, which is a reversal pattern in a downtrend. And finally, the discrepancy between the price chart and the RSI indicator is also in favor of the Bull. And although these are not signals for action, we advise you to consider the possibility of a reversal in your trading strategy. 

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