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Get ready for Bitcoin to make a big intraday move (Technical Analysis)

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Over the past few months, things have been pretty dormant in bitcoin (BTC-USD) is part of the crypto world. Instead, all the hype was around Ethereum (ETH-USD) and GPU mining as the previous move From proof of work to proof of stake. But Bitcoin has not significantly changed any of its platforms during this time. He has almost fallen asleep due to his trading style in recent weeks. But what appears to be a paint drying moment for traders looking to turn into a major move in the coming weeks.

Those who have followed my writing may remember Last technical analysis a year ago When I pointed out the highs where Bitcoin was trading at $54,000. Of course, subscribers got the information While it was $42,000 The setup process also unfolded. Bitcoin touched $22 for $69,000 exactly one month later. This was my tool for predicting the direction of Bitcoin in the near and medium term, and it worked a few times.

For whatever reason, Bitcoin likes to revisit similar trading patterns and structures. And while the current setup does not include the same bearish bullish flag nor a fully formed cup and handle as last year, it is repeating another of its popular patterns at the moment.

Look at the style

The problem with this pattern is that it is a bearish pattern that is used to predict the continuation of a downtrend, however it can also be a reversal pattern. And herein lies the problem of understanding the direction of this breakout: Is Bitcoin going up or down? Unfortunately, the descending triangle is not easy to decipher, but we have some signs and pointers to help us.

Looking at the chart below, if the floor below $18,000-$17,500 breaks, we’re headed to much lower lows, likely around five figures very low – think $12,000-$13,000. However, if the descending triangle is breached to the upper side, we could see the beginning of a rally.

bitcoin chart

stockcharts.com

Confirmation is relatively simple to get going. A break below the triple bottom will confirm that more downside is ahead. Validation will come on a bounce as it tests the previous triple bottom support as resistance. From there, expect steeper dips. The breakout to the upside will be confirmed as it moved past and closes above the descending trend line. Validation will come once it crosses the highest vertex inside the triangle. In this case, it appears to be the $22,500 level.

For targets, the first high and first low of the triangle are subtracted and then added to the breakout or breakout. This gives us the expected level at which crypto will end in the near term. This line is a bit tricky because if I extend the upper resistance trendline, it can extend to the June highs.

bitcoin chart

stockcharts.com

This means that the difference in highs and lows is $14,767. It results in either a breakdown to $3,000 or a breakout to $34,267. However, the triangle is usually measured after, after The downtrend stops. This would set an August high. The difference in price between the highs and lows in this scenario is $7,600. This creates goals of $10,000 or $27,100. This is a more reasonable scenario because the goals are not significantly out of scope.

Which direction do we expect

So what are the odds of this moving in one direction over the other? It’s hard to tell before we have a day with a lot of volatility or a big movement. But based entirely on the odds of the pattern, it is a bearish result; Fits well with continuity style standards.

However, this level has a lot of support as it extends until December 2020. This requires heavy and continuous selling to break below the support level. Not impossible or far-fetched, but as I told my subscribers to my channel, with the S&P 500 (SP500) Looking to head higher, Bitcoin will likely follow (or even lead) the suit.

bitcoin chart

stockcharts.com

But to add to the bullish potential, the MACD has been trending higher during this pattern. Since its June lows, the MACD has made a disproportionate move up to its August highs. The return to the bottom of the pattern did not come with the return to the MACD lows. Instead, a much higher bottom was set.

bitcoin chart

stockcharts.com

Using indicators leads to a more likely bullish outcome. However, the cryptocurrency will have to cross the 50-day moving average and the red trend line to break to the upside. Were it not for the downside trend of this pattern and the double resistance to the upside, I would have put the odds of a breakout at 60% and a breakdown at 40%. However, given all the inputs, I would put the breakout at 40% and the breakout at 60%. And if you believe that this does not look convincing to the upside, and if there are no bullish indicators, the odds are closer to 20% for a breakout.

Get ready to move

I expect the cryptocurrency to make a move in the next couple of weeks. Technically, by the second week of November, the triangle will have reached the top and expired. A move should come before then. If no movement occurs, the pattern will be invalid, and the analysis will need another look to see where the cipher is going. I don’t expect this, but if it does, I will move towards a dangerous bottom formation if it continues sideways and does not break below the $18,000 support level.

I will also use input from the broader markets and indicators to give us an idea of ​​where Bitcoin is headed since there is a correlation between Bitcoin and the stock market (but with a larger beta). But regardless of the direction of this pattern, a big move is expected soon.

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