Bitcoin bulls should brace for a wild upward run towards USD 41,000.
According to Scott Melker, crypto trader and host of WOAS Podcast, the cryptocurrency sharp rebound from $ 32,000 to over $ 38,000 confirmed two instructive bullish reversal indicators: Double Bottom and Falling Wedge.
Bitcoin double bottom
Starting with the double bottom, Mr. Melker marked two consecutive lows on the Bitcoin four-hour (4H) chart, with a moderate peak in between. Such a structure indicates repeated rejection by bears. Meanwhile, its vitality goes up if an asset bounces off the second trough to close above the previous peak level.
Bitcoin has closed above the Double Bottom target—the pink line. Source: BTCUSD on TradingView.com
So it appears that Bitcoin did the same during its rally on Friday, leaving Mr. Melker saw an expanding upward rally for the Double Bottom Scenario. Bitcoin nearly hit the bullish reversal target by hitting the pink line near USD 34,880 as shown in the chart above, pending confirmation with a four-hour close.
The pink line [stands] broken, double bottom to be fixed with a closure above it, ”Mr. Melker remarked nonetheless. Target shown about 41K. Trading range EQ also broke if range should be high. “\
[Note: The Double Bottom target stands confirmed as of this press time.]
The other bullish reversal indicator, Falling Wedge, also hinted at an increase to $ 41,000 or more following Bitcoin’s breakout move on Friday.
In retrospect, a Falling Wedge in an uptrend is a continuation pattern that occurs when the market shrinks temporarily. The structure indicates the resumption of the uptrend. Again, this means that traders can look for potential buying opportunities when the price closes above the Pattern’s top trend line.
Bitcoin did the same today. The cryptocurrency also closed above USD 36,000, a level with a recent history of limiting upside gains. It pointed to renewed buying enthusiasm over crucial price bottoms, suggesting that traders may want to push the Rising Wedge’s breakthrough goals upwards.
Bitcoin Falling Wedge pattern pointing to a rally towards $50,000. Source: BTCUSD on TradingView.com
Typically, an asset will rise by as much as the maximum distance between the top and bottom trend lines of a wedge. In the case of Bitcoin, the gap is more than $ 11,000 wide. That puts Bitcoin on the way to $ 50,000.