Bitcoin start triangle after massive uptrend breaks $40k
|BTC/USD (Bitcoin) has broken above the $40,000 resistance zone after an exceptionally strong move up. Is the trend overstretched? Let’s review the wave and chart patterns.
That said, the counter trend decline did reach the 50% Fibonacci retracement level. This could indicate a deep or longer retracement via an ABC correction or ABCDE triangle.
Price Charts and Technical Analysis
The BTC/USD is not showing any significant signs of a reversal. There is no divergence on the 4 hour chart or higher time frames. Also, the momentum up is very strong.
As long as price stays above the 50-61.8% Fibonacci support zone, an uptrend has the best chance of continuing higher (blue arrow) for new high. Only a break below the deep Fibonacci levels would change and invalidate that view.
On the 1 hour chart, price action seems to have completed a wave A (pink) of a wave 4 (purple) correction. The wave could become numerous different types of corrections:
-
ABC flat.
-
ABCDE triangle.
-
ABC zigzag.
The first two options are the most likely scenarios. This means that a deeper retracement towards the resistance and then a bounce back down is the most likely pattern.
The analysis has been done with the ecs.SWAT method and ebook.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.